The table below is the balance sheet for all the banks combined in the banking system.AssetsLiabilities/Equity$ 75,000$ 750,000Demand depositsShareholders’ equityReservesLoans675,00075,000Securities45,000Fixed assets30,000Total$825,000Total$825,000a. Which one of the above figures is part of the money supply?(Click to select).v worth $are included in money supply.b. If all banks maintain 100% reserves, what happens to the money supply if $400 cash is deposited into one of the banks in thesystem?Money supply would (Click to select) vC. If none of the banks maintain reserves, what happens to the money supply if $400 cash is deposited into one of the banks in thesystem?Money supply would (Click to select)

Money supply is the total amount of money available in the economy. Central bank sets the money…

The table below is the balance sheet for all the banks combined in the banking system. Assets Liabilities/Equity $ 75,000 $ 750,000 Demand deposits Shareholders' equity Reserves Loans 675,000 75,000 Securities 45,000 Fixed assets 30,000 Total $825,000 Total $825,000 a. Which one of the above figures is part of the money supply? (Click to select) worth $ are included in money supply. b. If all banks maintain 100% reserves, what happens to the money supply if $400 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 $400 cash is deposited into one of the banks in the system?

The table below is the balance sheet for all the banks combined in the banking system. Assets Liabilities/Equity $ 75,000 $ 750,000 Demand deposits Shareholders' equity Reserves Loans 675,000 75,000 Securities 45,000 Fixed assets 30,000 Total $825,000 Total $825,000 a. Which one of the above figures is part of the money supply? (Click to select) worth $ are included in money supply. b. If all banks maintain 100% reserves, what happens to the money supply if $400 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 $400 cash is deposited into one of the banks in the system?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 35 If a bank has a required reserve ratio of 25% and there are $5,300,000 in deposits, what is amount of required reserves? $25,000 $280,000 $1,325,000 $2,275,000 $5,005,000
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2. The Third National Bank has reserves of $20,000 and checkable deposits of $100,000. The reserve ratio is 20 percent. Households deposit $5000 in currency into the bank and that currency is added to reserves. 2.1 How much excess reserves does the bank now have? Show your computation. 2.2 Complete the table below for the Third National Bank. Classify the assets and liabilities and net worth. What is the total assets of Third National Bank? The figures in the table below are for the Third National Bank. All figures are in thousands of dollars. Assets Liabilities and Net Worth Stock Shares $ 420 $ _____ $ _____ Reserves 25 _____ _____ Property 300 ____ _____ Securities 100 ____ _____ Loans 100 ____ _____ Demand Deposits 105 ____ _____ 2.3. If the required reserve ratio for the Third National Bank is 10 percent, what is the monetary multiplier?
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Banking Question 2 Please use the balance sheet for Bank Alpha to answer the questions. Assume Bank Alpha loans all of its excess reserves, and the assets and liabilities balance on the balance sheet. Show all work. Bank Alpha a. Required Reserves C. Loans e. Assets X $27,000.00 How much is X, the dollar amount of reserves? b. How much is the required reserve ratio? How much is the M? m Checking Deposits Saving Deposits Liabilities $5,000.00 Assume Bank Alpha loans its excess reserves to Bank Beta. Next Bank Beta loans their excess reserves to Bank Gamma. Please create balance sheets for Banks Beta and Gamma. Assume there are no excess reserves in this banking system. d. How much total money stock created in this banking system? What is the total of M1 for Bank Alpha? M2? $25,000.00
A commercial bank has actual reserves of $1 million and checkable-deposit liabilities of $9 million, and the required reserve ratio is 10 percent. The excess reserves of the bank are: Select one: a. $50,000 b. $100,000 c. $900,000 d. $1 million
Big bucks bank Assets Liabilities Total reserves $30mm demand deposits $190mm Loans $100mm Bonds $100mm Stockholder equity $40 mm Suppose the required reserve ratio is 10%. What is the maximum amount of money Big buck bank can create? If the reserve ratio is increased to 14%, what is the maximum amount of money BBB can create? 3 If the reserve ratio is still at 10% and BBB chose to buy bonds instead of making loans with its excess reserves, what is the maximum amount of money BBB can create? a) From question #1 & #3, if the prospective Loans and Bonds both paid interest of 6.8%, which strategy would be more profitable for BBB? b) If BBB decided to pursue #1 as a strategy, what is the maximum money making potential of the banking…
Question 1. A bank has $140,000 in reserves, $1,600,000 in loans, and checkable deposits of $1,250,000. If the required reserve ratio is 10%, how are reserves split between required reserves and excess reserves?
2. Here is the balance sheet of the consolidated banking system of the country of Zargadee (all entries are in millions): Consolidated Balance Sheet of the Entire Economy of Zargadee Assets Reserves Cash in Vault Deposits at CBZ Bonds Loans 50 90 Total Reserves Total Assets 140 460 1000 1600 Liabilities Deposits Borrowing from CBZ Total Liabilities 1400 200 1600 Assume that 1) households hold no currency and 2) banks hold no excess reserves. The current reserve requirement is 10%. The Central Bank of Zargadee (CBZ) uses the three traditional tools to perform monetary policy in an economy that is reserve constrained. a. Under our assumptions, what is the money multiplier? For each part (b)-(d) below, i) Conceptually explain the effect of the policy on the money supply. ii) Calculate the change in M1 given our assumptions. iii) Construct the new balance sheet of the consolidated banking system of Zargadee under the new policy. iv) When the money supply changes, list a chain of events to…
51)Consider the following for National City Bank. If the required reserve ratio is 4 percent, the excess reserves of National City Bank is Assets Liabilities Reserves $10,000 Deposits $100,000 Loans $90,000 Select one: a. $10,000 b. $6,000 c. $3,000 d. $4,000