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The table below is the balance sheet for the Oilers Bank, which has a target reserve ratio of 2%. Assets Reserves Loans Securities Fixed assets Total $7,500 85,000 21,250 11,250 125,000 Liabilities/Equity Demand Deposits Shareholders' equity Total $100,000 25,000 125,000 a. The Oilers Bank is (Click to select) by $ b. The bank makes a loan equal to the excess reserves and the borrower writes a cheque (for the full amount of the loan) to another customer of the bank, who then deposits it.

The table below is the balance sheet for the Oilers Bank, which has a target reserve ratio of 2%. Assets Reserves Loans Securities Fixed assets Total $7,500 85,000 21,250 11,250 125,000 Liabilities/Equity Demand Deposits Shareholders' equity Total $100,000 25,000 125,000 a. The Oilers Bank is (Click to select) by $ b. The bank makes a loan equal to the excess reserves and the borrower writes a cheque (for the full amount of the loan) to another customer of the bank, who then deposits it.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The table below is the balance sheet for the Oilers Bank, which has a target reserve ratio of 2%. 080 Assets Reserves Loans Securities Fixed assets Total $7,500 85,000 21,250 11,250 125,000 Liabilities/Equity Demand Deposits Shareholders' equity Total $100,000 25,000 125,000 a. The Oilers Bank is (Click to select) by $ b. The bank makes a loan equal to the excess reserves and the borrower writes a cheque (for the full amount of the loan) to another customer of the bank, who then deposits it. The new amount of excess reserves is $ c. Instead, the cheque written by the borrower is cleared against the Oilers Bank (the cheque was written to a customer of another bank) The amount of excess reserves held by the Oilers Bank is $ < Pray 11 of 40 Ne >
Transcribed Image Text:The table below is the balance sheet for the Oilers Bank, which has a target reserve ratio of 2%. 080 Assets Reserves Loans Securities Fixed assets Total $7,500 85,000 21,250 11,250 125,000 Liabilities/Equity Demand Deposits Shareholders' equity Total $100,000 25,000 125,000 a. The Oilers Bank is (Click to select) by $ b. The bank makes a loan equal to the excess reserves and the borrower writes a cheque (for the full amount of the loan) to another customer of the bank, who then deposits it. The new amount of excess reserves is $ c. Instead, the cheque written by the borrower is cleared against the Oilers Bank (the cheque was written to a customer of another bank) The amount of excess reserves held by the Oilers Bank is $ < Pray 11 of 40 Ne >
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