The table shows the commercial banks' balance sheet (aggregated over all the banks). Thecommercial banks' desired reserve ratio on all deposits is 5 percent and there is no currency drain.What is the quantity of loans and the quantity of total deposits when the banks have no excess reserves?>>> Answer to 2 decimal places.FedCash in vaultSecuritiesLoansThe total quantity of loans after the banks have lent all their excess reserves is $million.AssetsLiabilities(millions of dollars)Reserves at the420595Checkable deposits105Savings deposits100

To solve this question, we need to determine the quantity of loans and the quantity of total…

Answered: The table shows the commercial banks'…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4
The table given below shows the assets and liabilities of the Tenth National Bank, Assume that this is the only bank in the economy. Table 16 Balance Sheet of Tenth National Bank Assets Liabilities Reserves $2,730 Deposits $7,640 Loans $3,300 Total Assets $7,640 Total Liabilities $7,640 Refer to Table 16. If this Bank's depositors withdraw $935, and the Federal Reserves decreases the reserve requirement from 12% to 9%. This bank's excess reserves will change by: O $313.35 O $371.05 O -$554.60 O -$621.65 -$563.95
Assume that banks lend out all their excess reserves and individuals deposit all their money. If the Required Reserve Ratio is .20, what does the Fed have to do to decrease the supply of money by $300 billion? Select one: a. Sell $60 billion worth of government bonds to commercial banks b. Sell $80 billion worth of government bonds to commercial banks c. Sell $200 billion worth of government bonds to commercial banks d. Buy $100 billion worth of government bonds from commercial banks e. Buy $60 billion worth of government bonds from commercial banks
Answer the next questions based on the following consolidated balance sheet for the whole commercial banking system for a hypothetical economy. Assume the required reserve ratio is 20%. All figures are in billions of dollars. Assets Liabilities + Net Worth Reserves $ 60 Securities 140 Loans 100 Property 400 Checkable deposits $200 Stock shares 500 What is the amount of excess reserves in this commercial banking system? What is the maximum amount that the money supply can be expanded? Show your workings. If the reserve ratio fell to 10%, what is now the maximum amount that the money supply can be expanded? Show your workings.
Total reserves $55 billion Transactions deposits: $600 billion Cash held by public: $400 billion Bonds held by public: $400 billion Stocks held by public: $140 billion Gross domestic product: $8 trillion Interest rate: 6 percent Required reserve ratio: 0.10 How large is the money supply (M1)? How much excess reserves are there? What is the money multiplier? What is the available lending capacity?
Use the following information to answer the questions: Suppose the Texans Bank has total deposit of $2,769, and the required reserve ratio of 6 percent. The current total reserve for the bank is $438. What is the excess reserve for this bank? [Hint: enter your answer in 2 decimal places)
Show the changes to the balance sheets for commercial banks when the Federal Reserve buys $50 million in US Treasury Bills. If the public holds a fixed amount of currency ( so that all loans create an equal amount of deposits in the banking system), the minimum reserve requirement is 5%, by how much will checkable bank deposits in commercial banks change?
Am. 398.
Based on the T Chart, if The FED Bought $1,000 in Bonds from this bank what numbers would change? Assets Liabilities and Equity $20,000 Required Reserves(Vault) $2,000 Demand Deposits Excess Reserves (Loanable Funds) $3,000 Business Loans $5,000 Student Loans $10,000 Government Securities Total Assets $5,000 Owner's Equity Total Liability $5,000 $25,000 $25,000
Money Supply Money Demand Interest Rate Investment (at Interest Rate Shown) $400 $600 2% $700 $400 500 3 600 $400 400 4 500 $400 300 5 300 $400 200 6 200 Answer the question on the basis of the information in the table. Suppose the legal reserve requirement is 20 percent and initially there are no excess reserves in the banking system. If the Fed wished to reduce the interest rate by 1 percentage point, it would A) sell $10 of government bonds in the open market. B) sell $20 of government bonds in the open market. C) buy $10 of government bonds in the open market. D) buy $20 of government bonds in the open market.
Assuming that banks lend all of their access reserves and people deposit all of their money, what will the Fed have to do in order to increase the supply of money by $120 billion if the Required Reserves Ratio is .20? Select one: a. It needs to buy $20 billion dollar worth of bonds from banks b. It needs to buy $24 billion dollar worth of bonds from banks c. It needs to sell $20 billion dollar worth of bonds from banks d. It needs to sell $24 billion dollar worth of bonds from banks e. It needs to sell $40 billion dollar worth of bonds from banks
Suppose the reserve requirement is 15%, banks hold no excess reserves, and there are no additional currency holdings. Find the change in deposits, reserves, and loans for each bank in the following scenario. Instructions: Round your answers to two decimal places. a. Henry receives a check for $10,000 from selling his car and deposits the check Into Tennessee Bank. Use the table below to show the change in assets and liabilities at Tennessee Bank resulting from this transaction. Assets Change in Reserves: $ Change in Loans: $ b. Suppose that Julle gets a loan from Tennessee Bank in the amount from the "Loans" cell in the table in part a, and uses it to buy some tools from Todd. Todd deposits the money from Julle Into Kentucky Bank. Use the table below to show the change in assets and llabilities at Kentucky Bank resulting from this transaction. Assets Change in Reserves: $ Change in Loans: $ Liabilities Change in Deposits: $ Assets Change in Reserves: $ Change in Loans: $ Liabilities…

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