Balance sheet of the Spring bank Assets Liabilities Cash $ 4,000 Deposited with the Fed
Posted: Thu May 19, 2022 10:25 am
Balance sheet of the Spring bank
Assets
Liabilities
Cash
$ 4,000
Deposited with the Fed $ 3,000
Loans
$ 113,000
Deposits $ 100,000
Capital $ 20,000
Total
$ 120,000
Total $
120,000
The required reserve ratio (RRR) on all deposits is 6%
e. How much new amount of loan will this bank be able to create
with the RRR of 5%?
f. How much new amount of loan the entire banking system be able
to create because of the excess reserves?
g. What happens to money supply after reducing the RRR
from 6% to 5%?
Assets
Liabilities
Cash
$ 4,000
Deposited with the Fed $ 3,000
Loans
$ 113,000
Deposits $ 100,000
Capital $ 20,000
Total
$ 120,000
Total $
120,000
The required reserve ratio (RRR) on all deposits is 6%
e. How much new amount of loan will this bank be able to create
with the RRR of 5%?
f. How much new amount of loan the entire banking system be able
to create because of the excess reserves?
g. What happens to money supply after reducing the RRR
from 6% to 5%?