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tional Bank currently has $1,050 million in transaction deposits on its balance sheet. The current reserve requiremen t the Federal Reserve is decreasing this requirement to 10 percent. Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to lo rrowers return only 50 percent of these funds to National Bank as transaction deposits. Show the balance sheet of the Federal Reserve and National Bank if National Bank converts 90 percent of its excess ans and borrowers return 60 percent of these funds to National Bank as transaction deposits. Complete this question by entering your answers in the tabs below. Required A Required B Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to loans, but

tional Bank currently has $1,050 million in transaction deposits on its balance sheet. The current reserve requiremen t the Federal Reserve is decreasing this requirement to 10 percent. Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to lo rrowers return only 50 percent of these funds to National Bank as transaction deposits. Show the balance sheet of the Federal Reserve and National Bank if National Bank converts 90 percent of its excess ans and borrowers return 60 percent of these funds to National Bank as transaction deposits. Complete this question by entering your answers in the tabs below. Required A Required B Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to loans, but

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 4-5 (LG 4-3) National Bank currently has $1,050 million in transaction deposits on its balance sheet. The current reserve requirement is 12 percent, but the Federal Reserve is decreasing this requirement to 10 percent. a. Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to loans, but borrowers return only 50 percent of these funds to National Bank as transaction deposits. b. Show the balance sheet of the Federal Reserve and National Bank if National Bank converts 90 percent of its excess reserves to loans and borrowers return 60 percent of these funds to National Bank as transaction deposits. Complete this question by entering your answers in the tabs below. Required A Required B Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to loans, but borrowers return only 50 percent of these funds to National Bank as transaction deposits. (Enter your answers in millions. Do not round intermediate calculations. Round your "Panel B" answers to 3 decimal places. (e.g., 32.161)) Panel A: Initial Balance Sheets Assets Assets Panel B: Balance Sheet after All Changes Assets Assets Federal Reserve Bank million million million Federal Reserve Bank million National Bank million million National Bank < Required A Liabilities Liabilities Liabilities Liabilities Required B > million million million million
Transcribed Image Text:Problem 4-5 (LG 4-3) National Bank currently has $1,050 million in transaction deposits on its balance sheet. The current reserve requirement is 12 percent, but the Federal Reserve is decreasing this requirement to 10 percent. a. Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to loans, but borrowers return only 50 percent of these funds to National Bank as transaction deposits. b. Show the balance sheet of the Federal Reserve and National Bank if National Bank converts 90 percent of its excess reserves to loans and borrowers return 60 percent of these funds to National Bank as transaction deposits. Complete this question by entering your answers in the tabs below. Required A Required B Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to loans, but borrowers return only 50 percent of these funds to National Bank as transaction deposits. (Enter your answers in millions. Do not round intermediate calculations. Round your "Panel B" answers to 3 decimal places. (e.g., 32.161)) Panel A: Initial Balance Sheets Assets Assets Panel B: Balance Sheet after All Changes Assets Assets Federal Reserve Bank million million million Federal Reserve Bank million National Bank million million National Bank < Required A Liabilities Liabilities Liabilities Liabilities Required B > million million million million
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