Chapter 13 14 Exercise Liabilities Net Worth Assets 20 000 Demand Deposits 60 000 Actual Reserves Required Reserves 1 (43.75 KiB) Viewed 31 times
Chapter 13 14 Exercise Liabilities Net Worth Assets 20 000 Demand Deposits 60 000 Actual Reserves Required Reserves 2 (46.16 KiB) Viewed 31 times
CHAPTER 13 & 14 EXERCISE LIABILITIES & NET WORTH ASSETS 20,000 Demand Deposits 60,000 Actual Reserves Required Reserves Excess Reserves Loans 40,000 60,000 60,000 A. Given a Reserve Requirement of 20%, what is the required Reserve for this bank? What is the Excess Reserve for this bank? S_ B. How much money can this bank lend? s C. If this money goes through the Banking System, how much does the total money supply increase? $. D. IF the Reserve through the new Required Reserve? $ $ money policy, is lowered to 10%, what is the new Excess Reserve? E. NOW much can this bank lend? $_ F. If this money goes through the Banking system, how much does the total money supply increase after the change in the RR? $. G. So, through a change from 20% to 10%, the Banking System was able to increase the available supply of money by $
While Jon is walking to school one morning, a helicopter flying overhead drops $300. Not knowing how to return it, Jon keeps the money and deposits it in his bank. (No one in this economy holds cash.) If the bank keeps only 10 % of its money in reserves and is fully loaned out, calculate the following: How much money can the bank now lend out? a. b. After this initial transaction, by how much has the money in the economy changed? c. What's the money multiplier? d. How much money will eventually be created by the banking system from Jon's $300?
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