6....The Required Reserve Ratio is 25% for all banks. Assuming that all the customers that have outstanding loans have used all of those additional funds to invest in new machinery for their businesses (therefore, the amount of Checkable Deposits is the true liability the bank has to its customers), then $_____________ is the resulting change to the loan creating potential of the whole system (these three banks) as a result of Second National Bank customers depositing an additional $400,000 in AssetsUS Treasury BondsReserves (Cash)LoansAssetsUS Treasury BondsReserves (Cash)AssetsUS Treasury BondsReserves (Cash)LoansFirst National Bank$450,000$175,000$125,000Second National Bank$100,000$250,000Liabilities and Net WorthNet WorthCheckable Deposits$900,000$350,000$250,000Liabilities and Net WorthNet WorthCheckable DepositsThird National BankLiabilities and Net WorthNet WorthCheckable Deposits$500,000$250,000$250,000$100,000$1,000,000$500,000

In the world of business and finance, the term "reserves" refers to cash on hand that can be used…

Answered: The Required Reserve Ratio is 25% for…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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6....

The Required Reserve Ratio is 25% for all banks. Assuming that all the customers that have outstanding loans have used all of those additional funds to invest in new machinery for their businesses (therefore, the amount of Checkable Deposits is the true liability the bank has to its customers), then $_____________ is the resulting change to the loan creating potential of the whole system (these three banks) as a result of Second National Bank customers depositing an additional $400,000 in

Assets
US Treasury Bonds
Reserves (Cash)
Loans
Assets
US Treasury Bonds
Reserves (Cash)
Assets
US Treasury Bonds
Reserves (Cash)
Loans
First National Bank
$450,000
$175,000
$125,000
Second National Bank
$100,000
$250,000
Liabilities and Net Worth
Net Worth
Checkable Deposits
$900,000
$350,000
$250,000
Liabilities and Net Worth
Net Worth
Checkable Deposits
Third National Bank
Liabilities and Net Worth
Net Worth
Checkable Deposits
$500,000
$250,000
$250,000
$100,000
$1,000,000
$500,000

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