Answer Happy

Suppose a lottery winner deposits $4 million in cash into her transactions account at the Bank of America (BoA). Assume a reserve requirement of 10 percent and no excess reserves in the banking system prior to this deposit Instructions: Round your responses to two decimal places. a. Use the following T-account to show how her deposit initially affects the balance sheet at Bota Step 1. Bank of America Assets in millions) Liabilities (in millions) Reserves Deposits Required Excess Loans Total assets Total liabilities b. Has the money supply been changed by her deposit? (Click to seled) Use the following T-account to show the changes at BofA after the bank fully uses its new lending capacity Step 2 - Bank of America Assets (in millions) Liabilities (in millions) Reserves Deposits Required Excess Loans Total assets Total abilities 7
Has the money supply been changed by step 2? (Click to select) e. After the entire banking system uses the lending capacity of the initial (54 million) deposit, by how much will the following have changed? million Total deposits Total reserves million Total loans $ million The money supply s million