The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of 8%. Liabilities/Equity Demand Deposits Assets Reserves $117,000 s $1, 350,000 Loans 1,880, 000 Shareholders' equity 150,000 Securities 150,000 Fixed assets 153,000 Total 1,500,000 Total 1,500, 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 $|
The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of 8%. Liabilities/Equity Demand Deposits Assets Reserves $117,000 s $1, 350,000 Loans 1,880, 000 Shareholders' equity 150,000 Securities 150,000 Fixed assets 153,000 Total 1,500,000 Total 1,500, 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 $|
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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 8%.
Assets
Liabilities/Equity
Reserves
$117,000 s
Demand Deposits
$1,350,000
Loans
1,080, 000
Shareholders' equity
150,000
Securities
150,000
Fixed assets
153,000
Total
1,500,000
Total
1,500,000
The amount of
kcess 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 $
%24
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