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The table below is the current balance sheet for the Maple Leafs Bank. Answer the following questions assuming that the bank's target reserve ratio is 10%. Reserves Loans Assets Securities Fixed assets Total $120,000 $ 680,000 250,000 350,000 $1,400,000 Reserves (1) $1,200,000 $ (2) $ Liabilities / Equity Demand deposits Shareholders' equity. Total a. This bank is over-reserved by $30,000 b. Suppose that a loan, in the amount of the excess reserves found in part (a), is made to Sats Mundin. Show the resulting balance sheet in columns (1) in the table above. c. Suppose that Sats immediately spends all of his loan by writing a cheque to his psychologist, Freda Freud. She deposits it in her account, which happens to also be at the Maple Leafs Bank. The bank is now (Click to select) by $ d. Suppose, instead, that the bank makes a loan for the amount in your answer in part (a), which then clears against the Maple Leafs Bank. Show the resulting balance sheet in columns (2) in the table above. e. The Bank now has excess reserves of $ Suppose that there are a total of 9 other banks in the economy and that the balance sheet for the whole banking system is presented in the table below. Assume that each of the other banks also has a target reserve ratio of 10% wwwAssets (1 all) < Prev Liabilities / Equity Demand deposits 11 of 14 ⠀ Next > FL $900,000 $ 500,000 $1,400,000 (3 $9,000,000 $ (1 all) (1) S (2) He

The table below is the current balance sheet for the Maple Leafs Bank. Answer the following questions assuming that the bank's target reserve ratio is 10%. Reserves Loans Assets Securities Fixed assets Total $120,000 $ 680,000 250,000 350,000 $1,400,000 Reserves (1) $1,200,000 $ (2) $ Liabilities / Equity Demand deposits Shareholders' equity. Total a. This bank is over-reserved by $30,000 b. Suppose that a loan, in the amount of the excess reserves found in part (a), is made to Sats Mundin. Show the resulting balance sheet in columns (1) in the table above. c. Suppose that Sats immediately spends all of his loan by writing a cheque to his psychologist, Freda Freud. She deposits it in her account, which happens to also be at the Maple Leafs Bank. The bank is now (Click to select) by $ d. Suppose, instead, that the bank makes a loan for the amount in your answer in part (a), which then clears against the Maple Leafs Bank. Show the resulting balance sheet in columns (2) in the table above. e. The Bank now has excess reserves of $ Suppose that there are a total of 9 other banks in the economy and that the balance sheet for the whole banking system is presented in the table below. Assume that each of the other banks also has a target reserve ratio of 10% wwwAssets (1 all) < Prev Liabilities / Equity Demand deposits 11 of 14 ⠀ Next > FL $900,000 $ 500,000 $1,400,000 (3 $9,000,000 $ (1 all) (1) S (2) He

Macroeconomics: Private and Public Choice (MindTap Course List)
Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter13: Money And The Banking System
Section: Chapter Questions
Problem 1CQ
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nt #3 (CH nt #3 (CH 7,8,9) https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com Reserves Loans The table below is the current balance sheet for the Maple Leafs Bank. Answer the following questions assuming that the bank's target reserve ratio is 10%. Assets Securities Fixed assets Total $120,000 $ 680,000 250,000 350,000 $1,400,000 (1) Reserves $ (2) $1,200,000 Saved $ Liabilities / Equity Demand deposits Shareholders' equity. Total a. This bank is over-reserved by $30,000 b. Suppose that a loan, in the amount of the excess reserves found in part (a), is made to Sats Mundin. Show the resulting balance sheet in columns (1) in the table above. c. Suppose that Sats immediately spends all of his loan by writing a cheque to his psychologist, Freda Freud. She deposits it in her account, which happens to also be at the Maple Leafs Bank. < Prev The bank is now (Click to select) by $[ d. Suppose, instead, that the bank makes a loan for the amount in your answer in part (a), which then clears against the Maple Leafs Bank. Show the resulting balance sheet in columns (2) in the table above. e. The Bank now has excess reserves of $ Suppose that there are a total of 9 other banks in the economy and that the balance sheet for the whole banking system is presented in the table below. Assume that each of the other banks also has a target reserve ratio of 10%. Assets (1 all) Liabilities / Equity Demand deposits 11 of 14 www www $900,000 $ 500,000 $1,400,000 A Next > (3 $9,000,000 (1) $ (1 all) $ (2) He
Transcribed Image Text:nt #3 (CH nt #3 (CH 7,8,9) https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com Reserves Loans The table below is the current balance sheet for the Maple Leafs Bank. Answer the following questions assuming that the bank's target reserve ratio is 10%. Assets Securities Fixed assets Total $120,000 $ 680,000 250,000 350,000 $1,400,000 (1) Reserves $ (2) $1,200,000 Saved $ Liabilities / Equity Demand deposits Shareholders' equity. Total a. This bank is over-reserved by $30,000 b. Suppose that a loan, in the amount of the excess reserves found in part (a), is made to Sats Mundin. Show the resulting balance sheet in columns (1) in the table above. c. Suppose that Sats immediately spends all of his loan by writing a cheque to his psychologist, Freda Freud. She deposits it in her account, which happens to also be at the Maple Leafs Bank. < Prev The bank is now (Click to select) by $[ d. Suppose, instead, that the bank makes a loan for the amount in your answer in part (a), which then clears against the Maple Leafs Bank. Show the resulting balance sheet in columns (2) in the table above. e. The Bank now has excess reserves of $ Suppose that there are a total of 9 other banks in the economy and that the balance sheet for the whole banking system is presented in the table below. Assume that each of the other banks also has a target reserve ratio of 10%. Assets (1 all) Liabilities / Equity Demand deposits 11 of 14 www www $900,000 $ 500,000 $1,400,000 A Next > (3 $9,000,000 (1) $ (1 all) $ (2) He
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