The following balance sheet is for Big Bucks Bank. The reserve ratio is 20 percent.Assets(1)(2)Liabilities and net worth(1)(2)Reserves$ 22,000 $ 22,000$ 22,000 Checkable deposits$ 100,000$102,000 $ 102.000Socurities38,00038,00038,000Loans40,00042.00042,000c How will the bank's balance sheet appear after checks drawn for the entire amount of the new loans have been cleared against thebank? Show the new balance sheet in columns 2 and 2' by Inserting the values into the gray shaded cells.d. Using the original figures, revisit questions a, b, and c based on the assumption that the reserve ratio is 15 percent.Assets(3)(4)Llabilities and net worth6,(4)Reserves$ 22,000Checkable deponts$ 100,000Securities38,000Loan40,000What is the maximum amount of new loans that this bank can make?$1Show in columns 3 and 3' how the bank's balance sheet will appear after the bank has lent this additional amount. Add values into thegray shaded cells of the table.By how much has the money supply changed?How will the bank's belance sheet appear after checks drawn for the entire amount of the new loans have been cleared against thebank? Show this new balance sheet in columns 4 and 4. Add values into the gray shaded cells of the table.

the Maximum Amount of new loans that this bank made is $12000 The money supply has changed by…

Answered: What is the maximum amount of new loans…

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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1.
Examine the Falance sheet for a bank below: Assets Liabilities Reserves 600 000 Demand Deposits 5 230 000 Loans 2 000 000 Capital 1 250 000 Buildings 3 880 000 If the desired reserve ratio changes to 5 percent and the bank were to loan out those excess reserves, what is the otential expa nsion in demand deposits (increase in MS) in the banking system? ***You just need to put the number in your answer, no units or commas*** Answer:
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Give typing answer with explanation and conclusion
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What is the maximum amount of new loans that this bank can make? Show in columns 3 and 3' how the bank's balance sheet will appear after the bank has lent this additional amount Add values into the gray shaded cells of the table. By how much has the money supply changed?