The table below is the balance sheet for all the banks combined in the banking system. Assets Liabilities/Equity Demand deposits Shareholders' equity Reserves $12,500 $ 125,000 Loans 112,500 12,500 Securities 7,500 Fixed assets 5,000 Total $137,500 Total $137,500 a. Which one of the above figures is part of the money supply? Demand deposits v worth $ 125000 are included in money supply. b. If all banks maintain 100% reserves, what happens to the money supply if $300 cash is deposited into one of the banks in the system? Money supply would (Click to select) v c. If none of the banks maintain reserves, what happens to the money supply if $300 cash is deposited into one of the banks in the system? Money supply would (Click to select)
The table below is the balance sheet for all the banks combined in the banking system. Assets Liabilities/Equity Demand deposits Shareholders' equity Reserves $12,500 $ 125,000 Loans 112,500 12,500 Securities 7,500 Fixed assets 5,000 Total $137,500 Total $137,500 a. Which one of the above figures is part of the money supply? Demand deposits v worth $ 125000 are included in money supply. b. If all banks maintain 100% reserves, what happens to the money supply if $300 cash is deposited into one of the banks in the system? Money supply would (Click to select) v c. If none of the banks maintain reserves, what happens to the money supply if $300 cash is deposited into one of the banks in the system? Money supply would (Click to select)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Monetary System
Section: Chapter Questions
Problem 6PA
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![The table below is the balance sheet for all the banks combined in the banking system.
Assets
Liabilities/Equity
Demand deposits
Shareholders' equity
Reserves
$ 12,500
112,500
$ 125,000
Loans
12,500
Securities
7,500
Fixed assets
5,000
Total
$137,500
Total
$137,500
a. Which one of the above figures is part of the money supply?
Demand deposits
v worth $
125000 are included in money supply.
b. If all banks maintain 100% reserves, what happens to the money supply if $300 cash is deposited into one of the banks in the
system?
Money supply would (Click to select) v
C. If none of the banks maintain reserves, what happens to the money supply if $300 cash is deposited into one of the banks in the
system?
Money supply would (Click to select)
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Transcribed Image Text:The table below is the balance sheet for all the banks combined in the banking system.
Assets
Liabilities/Equity
Demand deposits
Shareholders' equity
Reserves
$ 12,500
112,500
$ 125,000
Loans
12,500
Securities
7,500
Fixed assets
5,000
Total
$137,500
Total
$137,500
a. Which one of the above figures is part of the money supply?
Demand deposits
v worth $
125000 are included in money supply.
b. If all banks maintain 100% reserves, what happens to the money supply if $300 cash is deposited into one of the banks in the
system?
Money supply would (Click to select) v
C. If none of the banks maintain reserves, what happens to the money supply if $300 cash is deposited into one of the banks in the
system?
Money supply would (Click to select)
< Prev
7 of 7
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