Balance sheet .

Question

Want to see more full solutions like this?

Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 15, Problem 6P

Subpart (a):

To determine

Balance sheet.

Subpart (a):

Expert Solution

Explanation of Solution

The required reserves are evaluated as follows:

Required Reserves=Required Reserve Ratio×Checkable deposits =0.25×200 billion =$50 billion

Hence, the required reserves are $50 billion.

The excess reserves are evaluated as follows:

Excess Reserves=Actual Reserves-Required Reserves =$52 billion-$50 billion =$2 billion

Hence, the excess reserves are $2 billion.

The maximum amount of a banking system is obtained by taking the product of the monetary multiplier and the amount of excess reserves. Thus, the monetary multiplier can be calculated as follows:

Monetary multiplier=1Required Reserve Ratio =10.25 =4

Hence, the monetary multiplier is 4.

Then, the maximum amount of loans is evaluated as follows:

Maximum amount of loans=4×$2 billion =$8 billion

Hence, the maximum amount of loan is $8 billion.

Table -1 shows the consolidated balance sheet obtained from the given diagram.

Table -1

Assets			Liabilities and Net worth
		(1)			(2)
Reserves	$52	$52	Checkable deposits	$200	$208
Securities	48	48
Loans	100	108

Economics Concept Introduction

Concept introduction:

Balance sheet: Itis a financial statement that encapsulates an organization’s assets, their liabilities, and equity of the shareholders at a particular point in time.

Subpart (b):

To determine

Balance sheet.

Subpart (b):

Expert Solution

Explanation of Solution

The required reserves are evaluated as follows:

Required Reserves=Required Reserve Ratio×Checkable deposits =0.20×$200 billion =$40 billion

Hence, the required reserves are $40 billion.

The excess reserves are evaluated as follows:

Excess Reserves=Actual Reserves-Required Reserves =$52 billion-$40 billion =$12 billion

Hence, the excess reserves are $12 billion.

Thus, the monetary multiplier is evaluated as follows:

Money multiplier=1Required Reserve ratio =10.2 =5

Hence, the money multiplier is 5.

Then the maximum amount of loans is evaluated as follows:

Maximum amount of loans=Money multiplier×Excess Reserves =5×$12 billion =$60 billion

Hence, the maximum amount of loans is $60 billion.

Table -2 shows the new consolidated balance sheet obtained from the given diagram.

Table -2

Assets			Liabilities and Net worth
		(1)			(2)
Reserves	$52	$52	Checkable deposits	$200	$260
Securities	48	48
Loans	100	160

With the required reserve ratio of 20% (rather than 25%), the difference in the amount of the commercial banking system is evaluated as follows:

Difference in the amount that the banking system can lend =(1st Maximum amount of loan-2nd Maximum amount of loan) =$60 billion-$8 billion =$52 billion

Hence, the banking system can lend $52 billion more.

Economics Concept Introduction

Concept introduction:

Balance sheet: Itis a financial statement that encapsulates an organization’s assets, their liabilities, and equity of the shareholders at a particular point in time.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Johnny brought $39.50 to the art supply store. He bought a brush, a sketchbook, and a paint set. The brush was 1 6 as much as the sketchbook, and the sketchbook cost 3 4 the cost of the paint set. Johnny had $2.00 left over after buying these items.

A young woman plans to retire early in 25 years. She believes she can save $10,000 each year starting now. If she plans to begin withdrawing money one year after she makes her last payment into the retirement account (i.e., in the 26th year), what uniform amount could she withdraw each year for 30 years, if the account earns an interest rate of 8% per year? a) Correctly plot the cash flow diagram with its respective vectors, arrowheads, units, and currency values. b) Correct mathematical approach and development, use of compound interest factors.c) Financial logic in the development of the exercise and application of the concept of time value of money. d) Final numerical answer and writing in prose with a minimum of 20 words and a maximum of 50 words of the obtained numerical interpretation.

A hospital charges $200 for a medical procedure, and 1,000 patients use the service. The hospital raises the price to $250, and the number of patients drops to 900. Calculate the price elasticity of demand (PED) and explain your answer. (show all working) Briefly explain how elasticity affects government health policies in the following cases: • Taxes on unhealthy products (cigarettes, alcohol, sugary drinks) • Subsidizing Preventive Care (e.g., vaccines, screenings) Drug Price Controls & Generic Substitutions Co-Payments & Insurance Design

Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 15, Problem 6P

Subpart (a):

To determine

Balance sheet.

Subpart (a):

Expert Solution

Explanation of Solution

The required reserves are evaluated as follows:

Required Reserves=Required Reserve Ratio×Checkable deposits =0.25×200 billion =$50 billion

Hence, the required reserves are $50 billion.

The excess reserves are evaluated as follows:

Excess Reserves=Actual Reserves-Required Reserves =$52 billion-$50 billion =$2 billion

Hence, the excess reserves are $2 billion.

The maximum amount of a banking system is obtained by taking the product of the monetary multiplier and the amount of excess reserves. Thus, the monetary multiplier can be calculated as follows:

Monetary multiplier=1Required Reserve Ratio =10.25 =4

Hence, the monetary multiplier is 4.

Then, the maximum amount of loans is evaluated as follows:

Maximum amount of loans=4×$2 billion =$8 billion

Hence, the maximum amount of loan is $8 billion.

Table -1 shows the consolidated balance sheet obtained from the given diagram.

Table -1

Assets			Liabilities and Net worth
		(1)			(2)
Reserves	$52	$52	Checkable deposits	$200	$208
Securities	48	48
Loans	100	108

Economics Concept Introduction

Concept introduction:

Balance sheet: Itis a financial statement that encapsulates an organization’s assets, their liabilities, and equity of the shareholders at a particular point in time.

Subpart (b):

To determine

Balance sheet.

Subpart (b):

Expert Solution

Explanation of Solution

The required reserves are evaluated as follows:

Required Reserves=Required Reserve Ratio×Checkable deposits =0.20×$200 billion =$40 billion

Hence, the required reserves are $40 billion.

The excess reserves are evaluated as follows:

Excess Reserves=Actual Reserves-Required Reserves =$52 billion-$40 billion =$12 billion

Hence, the excess reserves are $12 billion.

Thus, the monetary multiplier is evaluated as follows:

Money multiplier=1Required Reserve ratio =10.2 =5

Hence, the money multiplier is 5.

Then the maximum amount of loans is evaluated as follows:

Maximum amount of loans=Money multiplier×Excess Reserves =5×$12 billion =$60 billion

Hence, the maximum amount of loans is $60 billion.

Table -2 shows the new consolidated balance sheet obtained from the given diagram.

Table -2

Assets			Liabilities and Net worth
		(1)			(2)
Reserves	$52	$52	Checkable deposits	$200	$260
Securities	48	48
Loans	100	160

With the required reserve ratio of 20% (rather than 25%), the difference in the amount of the commercial banking system is evaluated as follows:

Difference in the amount that the banking system can lend =(1st Maximum amount of loan-2nd Maximum amount of loan) =$60 billion-$8 billion =$52 billion

Hence, the banking system can lend $52 billion more.

Economics Concept Introduction

Concept introduction:

Balance sheet: Itis a financial statement that encapsulates an organization’s assets, their liabilities, and equity of the shareholders at a particular point in time.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 15, Problem 6P

Subpart (a):

To determine

Balance sheet.

Subpart (a):

Expert Solution

Explanation of Solution

The required reserves are evaluated as follows:

Required Reserves=Required Reserve Ratio×Checkable deposits =0.25×200 billion =$50 billion

Hence, the required reserves are $50 billion.

The excess reserves are evaluated as follows:

Excess Reserves=Actual Reserves-Required Reserves =$52 billion-$50 billion =$2 billion

Hence, the excess reserves are $2 billion.

The maximum amount of a banking system is obtained by taking the product of the monetary multiplier and the amount of excess reserves. Thus, the monetary multiplier can be calculated as follows:

Monetary multiplier=1Required Reserve Ratio =10.25 =4

Hence, the monetary multiplier is 4.

Then, the maximum amount of loans is evaluated as follows:

Maximum amount of loans=4×$2 billion =$8 billion

Hence, the maximum amount of loan is $8 billion.

Table -1 shows the consolidated balance sheet obtained from the given diagram.

Table -1

Assets			Liabilities and Net worth
		(1)			(2)
Reserves	$52	$52	Checkable deposits	$200	$208
Securities	48	48
Loans	100	108

Economics Concept Introduction

Concept introduction:

Balance sheet: Itis a financial statement that encapsulates an organization’s assets, their liabilities, and equity of the shareholders at a particular point in time.

Subpart (b):

To determine

Balance sheet.

Subpart (b):

Expert Solution

Explanation of Solution

The required reserves are evaluated as follows:

Required Reserves=Required Reserve Ratio×Checkable deposits =0.20×$200 billion =$40 billion

Hence, the required reserves are $40 billion.

The excess reserves are evaluated as follows:

Excess Reserves=Actual Reserves-Required Reserves =$52 billion-$40 billion =$12 billion

Hence, the excess reserves are $12 billion.

Thus, the monetary multiplier is evaluated as follows:

Money multiplier=1Required Reserve ratio =10.2 =5

Hence, the money multiplier is 5.

Then the maximum amount of loans is evaluated as follows:

Maximum amount of loans=Money multiplier×Excess Reserves =5×$12 billion =$60 billion

Hence, the maximum amount of loans is $60 billion.

Table -2 shows the new consolidated balance sheet obtained from the given diagram.

Table -2

Assets			Liabilities and Net worth
		(1)			(2)
Reserves	$52	$52	Checkable deposits	$200	$260
Securities	48	48
Loans	100	160

With the required reserve ratio of 20% (rather than 25%), the difference in the amount of the commercial banking system is evaluated as follows:

Difference in the amount that the banking system can lend =(1st Maximum amount of loan-2nd Maximum amount of loan) =$60 billion-$8 billion =$52 billion

Hence, the banking system can lend $52 billion more.

Economics Concept Introduction

Concept introduction:

Balance sheet: Itis a financial statement that encapsulates an organization’s assets, their liabilities, and equity of the shareholders at a particular point in time.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 15, Problem 6P

Subpart (a):

To determine

Balance sheet.

Subpart (a):

Expert Solution

Explanation of Solution

The required reserves are evaluated as follows:

Required Reserves=Required Reserve Ratio×Checkable deposits =0.25×200 billion =$50 billion

Hence, the required reserves are $50 billion.

The excess reserves are evaluated as follows:

Excess Reserves=Actual Reserves-Required Reserves =$52 billion-$50 billion =$2 billion

Hence, the excess reserves are $2 billion.

The maximum amount of a banking system is obtained by taking the product of the monetary multiplier and the amount of excess reserves. Thus, the monetary multiplier can be calculated as follows:

Monetary multiplier=1Required Reserve Ratio =10.25 =4

Hence, the monetary multiplier is 4.

Then, the maximum amount of loans is evaluated as follows:

Maximum amount of loans=4×$2 billion =$8 billion

Hence, the maximum amount of loan is $8 billion.

Table -1 shows the consolidated balance sheet obtained from the given diagram.

Table -1

Assets			Liabilities and Net worth
		(1)			(2)
Reserves	$52	$52	Checkable deposits	$200	$208
Securities	48	48
Loans	100	108

Economics Concept Introduction

Concept introduction:

Balance sheet: Itis a financial statement that encapsulates an organization’s assets, their liabilities, and equity of the shareholders at a particular point in time.

Subpart (b):

To determine

Balance sheet.

Subpart (b):

Expert Solution

Explanation of Solution

The required reserves are evaluated as follows:

Required Reserves=Required Reserve Ratio×Checkable deposits =0.20×$200 billion =$40 billion

Hence, the required reserves are $40 billion.

The excess reserves are evaluated as follows:

Excess Reserves=Actual Reserves-Required Reserves =$52 billion-$40 billion =$12 billion

Hence, the excess reserves are $12 billion.

Thus, the monetary multiplier is evaluated as follows:

Money multiplier=1Required Reserve ratio =10.2 =5

Hence, the money multiplier is 5.

Then the maximum amount of loans is evaluated as follows:

Maximum amount of loans=Money multiplier×Excess Reserves =5×$12 billion =$60 billion

Hence, the maximum amount of loans is $60 billion.

Table -2 shows the new consolidated balance sheet obtained from the given diagram.

Table -2

Assets			Liabilities and Net worth
		(1)			(2)
Reserves	$52	$52	Checkable deposits	$200	$260
Securities	48	48
Loans	100	160

With the required reserve ratio of 20% (rather than 25%), the difference in the amount of the commercial banking system is evaluated as follows:

Difference in the amount that the banking system can lend =(1st Maximum amount of loan-2nd Maximum amount of loan) =$60 billion-$8 billion =$52 billion

Hence, the banking system can lend $52 billion more.

Economics Concept Introduction

Concept introduction:

Balance sheet: Itis a financial statement that encapsulates an organization’s assets, their liabilities, and equity of the shareholders at a particular point in time.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 15, Problem 6P

Subpart (a):

To determine

Balance sheet.

Subpart (a):

Expert Solution

Explanation of Solution

The required reserves are evaluated as follows:

Required Reserves=Required Reserve Ratio×Checkable deposits =0.25×200 billion =$50 billion

Hence, the required reserves are $50 billion.

The excess reserves are evaluated as follows:

Excess Reserves=Actual Reserves-Required Reserves =$52 billion-$50 billion =$2 billion

Hence, the excess reserves are $2 billion.

The maximum amount of a banking system is obtained by taking the product of the monetary multiplier and the amount of excess reserves. Thus, the monetary multiplier can be calculated as follows:

Monetary multiplier=1Required Reserve Ratio =10.25 =4

Hence, the monetary multiplier is 4.

Then, the maximum amount of loans is evaluated as follows:

Maximum amount of loans=4×$2 billion =$8 billion

Hence, the maximum amount of loan is $8 billion.

Table -1 shows the consolidated balance sheet obtained from the given diagram.

Table -1

Assets			Liabilities and Net worth
		(1)			(2)
Reserves	$52	$52	Checkable deposits	$200	$208
Securities	48	48
Loans	100	108

Economics Concept Introduction

Concept introduction:

Balance sheet: Itis a financial statement that encapsulates an organization’s assets, their liabilities, and equity of the shareholders at a particular point in time.

Subpart (b):

To determine

Balance sheet.

Subpart (b):

Expert Solution

Explanation of Solution

The required reserves are evaluated as follows:

Required Reserves=Required Reserve Ratio×Checkable deposits =0.20×$200 billion =$40 billion

Hence, the required reserves are $40 billion.

The excess reserves are evaluated as follows:

Excess Reserves=Actual Reserves-Required Reserves =$52 billion-$40 billion =$12 billion

Hence, the excess reserves are $12 billion.

Thus, the monetary multiplier is evaluated as follows:

Money multiplier=1Required Reserve ratio =10.2 =5

Hence, the money multiplier is 5.

Then the maximum amount of loans is evaluated as follows:

Maximum amount of loans=Money multiplier×Excess Reserves =5×$12 billion =$60 billion

Hence, the maximum amount of loans is $60 billion.

Table -2 shows the new consolidated balance sheet obtained from the given diagram.

Table -2

Assets			Liabilities and Net worth
		(1)			(2)
Reserves	$52	$52	Checkable deposits	$200	$260
Securities	48	48
Loans	100	160

With the required reserve ratio of 20% (rather than 25%), the difference in the amount of the commercial banking system is evaluated as follows:

Difference in the amount that the banking system can lend =(1st Maximum amount of loan-2nd Maximum amount of loan) =$60 billion-$8 billion =$52 billion

Hence, the banking system can lend $52 billion more.

Economics Concept Introduction

Concept introduction:

Balance sheet: Itis a financial statement that encapsulates an organization’s assets, their liabilities, and equity of the shareholders at a particular point in time.

Answer 6

Chapter 15, Problem 6P

Subpart (a):

To determine

Balance sheet.

Subpart (a):

Expert Solution

Explanation of Solution

The required reserves are evaluated as follows:

Required Reserves=Required Reserve Ratio×Checkable deposits =0.25×200 billion =$50 billion

Hence, the required reserves are $50 billion.

The excess reserves are evaluated as follows:

Excess Reserves=Actual Reserves-Required Reserves =$52 billion-$50 billion =$2 billion

Hence, the excess reserves are $2 billion.

The maximum amount of a banking system is obtained by taking the product of the monetary multiplier and the amount of excess reserves. Thus, the monetary multiplier can be calculated as follows:

Monetary multiplier=1Required Reserve Ratio =10.25 =4

Hence, the monetary multiplier is 4.

Then, the maximum amount of loans is evaluated as follows:

Maximum amount of loans=4×$2 billion =$8 billion

Hence, the maximum amount of loan is $8 billion.

Table -1 shows the consolidated balance sheet obtained from the given diagram.

Table -1

Assets			Liabilities and Net worth
		(1)			(2)
Reserves	$52	$52	Checkable deposits	$200	$208
Securities	48	48
Loans	100	108

Economics Concept Introduction

Concept introduction:

Balance sheet: Itis a financial statement that encapsulates an organization’s assets, their liabilities, and equity of the shareholders at a particular point in time.

Answer 7

Chapter 15, Problem 6P

Subpart (a):

To determine

Balance sheet.

Answer 8

Subpart (a):

Expert Solution

Explanation of Solution

The required reserves are evaluated as follows:

Required Reserves=Required Reserve Ratio×Checkable deposits =0.25×200 billion =$50 billion

Hence, the required reserves are $50 billion.

The excess reserves are evaluated as follows:

Excess Reserves=Actual Reserves-Required Reserves =$52 billion-$50 billion =$2 billion

Hence, the excess reserves are $2 billion.

The maximum amount of a banking system is obtained by taking the product of the monetary multiplier and the amount of excess reserves. Thus, the monetary multiplier can be calculated as follows:

Monetary multiplier=1Required Reserve Ratio =10.25 =4

Hence, the monetary multiplier is 4.

Then, the maximum amount of loans is evaluated as follows:

Maximum amount of loans=4×$2 billion =$8 billion

Hence, the maximum amount of loan is $8 billion.

Table -1 shows the consolidated balance sheet obtained from the given diagram.

Table -1

Assets			Liabilities and Net worth
		(1)			(2)
Reserves	$52	$52	Checkable deposits	$200	$208
Securities	48	48
Loans	100	108

Answer 9

Subpart (a):

Expert Solution

Answer 10

Subpart (a):

Expert Solution

Answer 11

Expert Solution

Answer 12

Economics Concept Introduction

Concept introduction:

Balance sheet: Itis a financial statement that encapsulates an organization’s assets, their liabilities, and equity of the shareholders at a particular point in time.

Answer 13

Subpart (b):

To determine

Balance sheet.

Subpart (b):

Expert Solution

Explanation of Solution

The required reserves are evaluated as follows:

Required Reserves=Required Reserve Ratio×Checkable deposits =0.20×$200 billion =$40 billion

Hence, the required reserves are $40 billion.

The excess reserves are evaluated as follows:

Excess Reserves=Actual Reserves-Required Reserves =$52 billion-$40 billion =$12 billion

Hence, the excess reserves are $12 billion.

Thus, the monetary multiplier is evaluated as follows:

Money multiplier=1Required Reserve ratio =10.2 =5

Hence, the money multiplier is 5.

Then the maximum amount of loans is evaluated as follows:

Maximum amount of loans=Money multiplier×Excess Reserves =5×$12 billion =$60 billion

Hence, the maximum amount of loans is $60 billion.

Table -2 shows the new consolidated balance sheet obtained from the given diagram.

Table -2

Assets			Liabilities and Net worth
		(1)			(2)
Reserves	$52	$52	Checkable deposits	$200	$260
Securities	48	48
Loans	100	160

With the required reserve ratio of 20% (rather than 25%), the difference in the amount of the commercial banking system is evaluated as follows:

Difference in the amount that the banking system can lend =(1st Maximum amount of loan-2nd Maximum amount of loan) =$60 billion-$8 billion =$52 billion

Hence, the banking system can lend $52 billion more.

Economics Concept Introduction

Concept introduction:

Balance sheet: Itis a financial statement that encapsulates an organization’s assets, their liabilities, and equity of the shareholders at a particular point in time.

Answer 14

Subpart (b):

To determine

Balance sheet.

Answer 15

Subpart (b):

Expert Solution

Explanation of Solution

The required reserves are evaluated as follows:

Required Reserves=Required Reserve Ratio×Checkable deposits =0.20×$200 billion =$40 billion

Hence, the required reserves are $40 billion.

The excess reserves are evaluated as follows:

Excess Reserves=Actual Reserves-Required Reserves =$52 billion-$40 billion =$12 billion

Hence, the excess reserves are $12 billion.

Thus, the monetary multiplier is evaluated as follows:

Money multiplier=1Required Reserve ratio =10.2 =5

Hence, the money multiplier is 5.

Then the maximum amount of loans is evaluated as follows:

Maximum amount of loans=Money multiplier×Excess Reserves =5×$12 billion =$60 billion

Hence, the maximum amount of loans is $60 billion.

Table -2 shows the new consolidated balance sheet obtained from the given diagram.

Table -2

Assets			Liabilities and Net worth
		(1)			(2)
Reserves	$52	$52	Checkable deposits	$200	$260
Securities	48	48
Loans	100	160

With the required reserve ratio of 20% (rather than 25%), the difference in the amount of the commercial banking system is evaluated as follows:

Difference in the amount that the banking system can lend =(1st Maximum amount of loan-2nd Maximum amount of loan) =$60 billion-$8 billion =$52 billion

Hence, the banking system can lend $52 billion more.

Answer 16

Subpart (b):

Expert Solution

Answer 17

Subpart (b):

Expert Solution

Answer 18

Expert Solution

Answer 19

Economics Concept Introduction

Concept introduction:

Balance sheet: Itis a financial statement that encapsulates an organization’s assets, their liabilities, and equity of the shareholders at a particular point in time.