The table below is the balance sheet for all the banks combined in the banking system. Reserves Loans Assets Securities Fixed assets Total $ 110,000 990,000 66,000 44,000 $1,210,000 Liabilities/Equity Demand deposits Shareholders' equity Total a. Which one of the above figures is part of the money supply? $ 1,100,000 110,000 $1,210,000 Demand deposits worth $1,100,000 are included in money supply. b. If all banks maintain 100% reserves, what happens to the money supply if $460 cash is deposited into one of the banks in the system? Money supply would not change V c. If none of the banks maintain reserves, what happens to the money supply if $460 cash is deposited into one of the banks in the system? Money supply would increase without limit

The table below is the balance sheet for all the banks combined in the banking system. Reserves Loans Assets Securities Fixed assets Total $ 110,000 990,000 66,000 44,000 $1,210,000 Liabilities/Equity Demand deposits Shareholders' equity Total a. Which one of the above figures is part of the money supply? $ 1,100,000 110,000 $1,210,000 Demand deposits worth $1,100,000 are included in money supply. b. If all banks maintain 100% reserves, what happens to the money supply if $460 cash is deposited into one of the banks in the system? Money supply would not change V c. If none of the banks maintain reserves, what happens to the money supply if $460 cash is deposited into one of the banks in the system? Money supply would increase without limit

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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