The Third National Bank has reserves of $20,000 and checkable deposits of $100,000. The reserve ratio is 20 percent. Households deposit $5000 in currency into the bank and that currency is added to reserves. Recall, to calculate checkable deposits you have to add the original checkable deposits to the new deposit. To calculate required reserves for the deposits, you have to multiply the required reserve ratio (decimal from) by checkable deposits. To calculate excess reserves, you will subtract required reserves from actual reserves. Complete the table attached for the Third National Bank. You have to distinguish between a bank's assets and bank's liabilities. The figures in the table attached are for the Third National Bank. All figures are in thousands of dollars. 1. What is the total assets of this bank? Explain the basics of this bank’s balance sheet. 2. If the monetary multiplier is 4, what is the required reserve ratio? Describe how and identify by what amount the Third National Bank can create money in the economy. Recall that, generally, bank creates money in a typical economy by making loans. The Fed sets the reserve requirement (the required reserve ratio) that directly affects the amount of money creation. 3.What is the major objective of monetary policy in the US economy? Explain why.
The Third National Bank has reserves of $20,000 and checkable deposits of $100,000. The reserve ratio is 20 percent. Households deposit $5000 in currency into the bank and that currency is added to reserves.
Recall, to calculate checkable deposits you have to add the original checkable deposits to the new deposit. To calculate
Complete the table attached for the Third National Bank. You have to distinguish between a bank's assets and bank's liabilities.
The figures in the table attached are for the Third National Bank. All figures are in thousands of dollars.
1. What is the total assets of this bank? Explain the basics of this bank’s
2. If the monetary multiplier is 4, what is the required reserve ratio? Describe how and identify by what amount the Third National Bank can create money in the economy.
Recall that, generally, bank creates money in a typical economy by making loans. The Fed sets the reserve requirement (the required reserve ratio) that directly affects the amount of money creation.
3.What is the major objective of
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