Table 1 shows the financial position of the Smithville Bank once $4025.00 has been deposited. Assume that the required reserve ratio is 8.00%. The bank manager decides to lend Billy Bob Smith all of the bank's excess reserves. Billy Bob takes the funds to Eula Mae's Used Machines and buys a pickup truck. Eula Mae then deposits the money in her account back at the Smithville Bank. Table 2 should show the bank's accounts after the loan is made and the funds again deposited. Round all answers to the nearest cent. Table 1. Original Assets and Liabilities Assets reserves: $4025.00 Assets Liabilities Table 2. Assets and Liabilities After Bank Makes a Loan reserves: ? deposits: $4025.00 Liabilities deposits: ?

Table 1 shows the financial position of the Smithville Bank once $4025.00 has been deposited. Assume that the required reserve ratio is 8.00%. The bank manager decides to lend Billy Bob Smith all of the bank's excess reserves. Billy Bob takes the funds to Eula Mae's Used Machines and buys a pickup truck. Eula Mae then deposits the money in her account back at the Smithville Bank. Table 2 should show the bank's accounts after the loan is made and the funds again deposited. Round all answers to the nearest cent. Table 1. Original Assets and Liabilities Assets reserves: $4025.00 Assets Liabilities Table 2. Assets and Liabilities After Bank Makes a Loan reserves: ? deposits: $4025.00 Liabilities deposits: ?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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