Suppose that National Bank of Guerneville has $31 million in checkable deposits, Commonwealth Bank has $43 million in checkable deposits, and the required reserve ratio for checkable depositsis 10%. If National Bank of Guerneville has $4 million in reserves and Commonwealth has $5 million in reserves, how much in excess reserves does each bank have? (Enter your answers roundedto one decimal place.)National Bank of Guerneville has $ 0.9 million in excess reserves.Commonwealth Bank has $ 0.7 million in excess reserves.Now suppose that a customer of National Bank of Guerneville writes a check for $1 million to a real estate broker who deposits the check at Commonwealth. After the check clears, how much inexcess reserves does each bank have?National Bank of Guerneville has $0 million in excess reserves.Commonwealth Bank has $ million in excess reserves.

Step: 1To calculate the excess reserves for each bank after the check is deposited at Commonwealth…

Answered: Suppose that National Bank of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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12
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Suppose that Kesha deposits $8,000 into her savings account at First Bank. The reserve requirement facing First Bank Is 20%. Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. a. Use this information to show how First Bank's assets and liabilities Initially change when Kesha deposits the $8,000 in the bank. A Simple Bank Balance Sheet Assets Change in Reserves: $ Liabilities Change in Deposits: $ b. How much money can First Bank lend out to other people? $ c. Now suppose that First Bank holds no excess reserves and lends out all of the excess reserves resulting from Kesha's deposit. How do First Bank's assets and liabilities change? A Simple Bank Balance Sheet Assets Change in Reserves: $ Change in Loans: $ Liabilities
Suppose the central bank of Questville requires Goldenrod Bank to hold 10% of its deposits as reserves. If Angel deposits $8500 in Goldenrod Bank, what is the maximum amount of their deposit that Goldenrod Bank can lend out?
The following data represents money from a small Island economy near Fuji. Cash in the hands of the public = $402 Public credit limit on all credit cards= 136 Demand deposits and all other checkable deposits= 693 Money market mutual funds = 618 Travelers check = 8 Large time deposits = 512 Small time deposits= 971 Public stock market holdings = 1,069 Savings-type account = 256 What is the value of M1 for this economy using data above? What is the value of M2 for this economy using data above?
5. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 10%. Carlos, a client of First Main Street Bank, deposits $500,000 into his checking account at First Main Street Bank. Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans). Assets Liabilities Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 10%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess (Dollars) (Dollars) rves Chan in Required Reserves (Dollars) 500,000 Now, suppose First Main Street Bank loans out all of its new excess reserves to Amy, who immediately uses the funds to write a check to Van. Van deposits the funds immediately into his checking account at Second Republic Bank. Then Second…
4
Suppose that in a given month $52 million is deposited into the banking system while $60 million is withdrawn. Also suppose that the Fed has set the reserve requirement at 8 percent and that banks have no excess reserves at the beginning of the month. What is the maximum amount of new checkable-deposit money that can be created (or removed) by the banking system as a result of these deposits and withdrawals? Instructions: Enter your answer as a whole number. Enter a positive number to show an increase and a negative number (−) to show a decrease. $ million
E3
1z
Please see below. True or false questions. I need help with both. All forms of money that go into M2 also go into M1. True or False (I got False for this one). A bank's assets includes the money deposited there by individuals. True or False (I got false for this one because money deposited by individuals would be considered a liability because that is something that can be taken out at anytime by the depositor).
Am. 398.

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