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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Use the Fed and the banking system T-accounts to describe the effects of a Fed sale of $200 million worth of government bonds to bank that pays with part of its reserve held at the Fed. What would be the effect of this transaction on the Fed's monetary liabilities?
Assume that banks hold no excess reserves and that all currency is deposited into the banking system. If the required 10.00 %, and the Federal Reserve wants to increase the money supply by $80.00 million, the Fed would need to make a purchase of $ million. (Insert your answer in millions, and round to two decimal places.)
Homework: Chapter 13 Suppose the economy's entire money supply equals checkable deposits in the amount of $900,000 held in First Main Street Bank. The required reserve ratio is 10% with no excess reserves and no cash leakage. Reserves Loans First Main Street Bank's balance sheet Assets Reserves Loans $810,000 $90,000 Checkable Deposits $900,000 Suppose the Fed sells $3,000 worth of government securities to First Main Street Bank. Complete the following table to reflect the Fed's sale on the balance sheet for First Main Street Bank. Liabilities Assets STEP: 1 of 3 Checkable Deposits O The bank has zero excess reserves. Liabilities Based on its balance sheet, how can you characterise First Main Street Bank? O The bank has $3,000 in excess reserves. O The bank has $81,000 in excess reserves. The bank is reserve deficient.
12
Table 29-1 Effects of an open-market transaction on the balance sheets of Banks and the Fed (in millions of dollars) Banks Federal Reserve System Assets Liabilities Assets Liabilities Bank Reserves: Reserves: +$20 U.S. Gov't Sec. +$20 +$20 U.S. Gov't Securities:-$20 In Table 29-1, if the required reserve ratio is 5 percent, what will happen to the money supply? Use the oversimplified money multiplier in your calculations. The money supply will not change. The money supply will decrease by $400 million. The money supply will decrease by $100 million. The money supply will increase by $400 million. The money supply will increase by $20 million.
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
A bank has $20 in cash in its vaults, $280 deposited at the central bank, has made $1700 in loans to its customers and has $2000 in deposits from customers. What is this bank's actual reserve ratio? (Round to two decimal places and do not enter the percent. If your answer is 0.114 (11.4%), enter 0.11. If your answer is 0.115 (11.5%), enter 0.12. If appropriate, remember to enter the - sign.)
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?
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?
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