The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of 5%. Assets Reserves Loans $160,000 $ 2,533,250 Liabilities/Equity Demand Deposits $3,037,500 $ Shareholders' equity 337,500 Securities Fixed assets Total 337,500 344,250 3,375,000 Total 3,375,000 a. The amount of excess reserves is $ b. The maximum amount that loans and deposits could be increased by is $ c. Assume that the system becomes fully loaned up. Show the new balance sheet in the table above. d. Now that the system is fully loaned up, the money supply will have Increased by $

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of 5%.
Assets
Reserves
Loans
$160,000 $
2,533,250
Liabilities/Equity
Demand Deposits
$3,037,500
$
Shareholders' equity
337,500
Securities
Fixed assets
Total
337,500
344,250
3,375,000
Total
3,375,000
a. The amount of excess reserves is $
b. The maximum amount that loans and deposits could be increased by is $
c. Assume that the system becomes fully loaned up. Show the new balance sheet in the table above.
d. Now that the system is fully loaned up, the money supply will have Increased by $
Transcribed Image Text:The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of 5%. Assets Reserves Loans $160,000 $ 2,533,250 Liabilities/Equity Demand Deposits $3,037,500 $ Shareholders' equity 337,500 Securities Fixed assets Total 337,500 344,250 3,375,000 Total 3,375,000 a. The amount of excess reserves is $ b. The maximum amount that loans and deposits could be increased by is $ c. Assume that the system becomes fully loaned up. Show the new balance sheet in the table above. d. Now that the system is fully loaned up, the money supply will have Increased by $
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