Page 56. Use the following T-account information and the fact that the required reserve ratio in this economyis 0.10 (i.c., 10%) to answer the questions below (Show your work)TreasuryddT30 Bonds600BondsFed300 dd270BLoans todd30Banks200TFRN200Public1650 Loans fromBanks 950BanksCash30 dd p1650ddPdd270BOtherCash100Loans toDeposits150Bonds100Public950 Loans fromOtherBonds100Fed 200Deposits150a. What are the Bank Reserves?b. What are the Bank Required Reserves?c. What are the Bank Excess Reserves?d. What is the current Money Supply (MI)?e. If Banks maximized their Loans to the Public, using up all their excess reserves, what will be thenew Money Supply?f. The Fed did not like the new Money Supply and sold 50 in Bonds to Banks. After the banks boughtthe bonds, they have to call in loans from the public. What will be the new Money Supply endup being after the banks made the required changes?g. If the Banks refused the buy the 50 in bonds from the Fed and the Public bought the 50 in bonds,what would be the new Money Supply?

I can respond to the following queries using the data presented in the image:a. What are the Bank…

Answered: Page 5 6. Use the following T-account…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter27: Money And Banking

Section: Chapter Questions

Problem 31P: Humongous Bank is the only bank in the economy. The people in this economy have 20 million in money,...

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Similar questions

Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 44Deposits 255Loans 155 Securities 51Other $X Using the balance sheet above, find the level of excess reserves this bank is holding if the required reserve ratio = 6%(Give answers to 2 decimal places as needed)
How can banks compute and quote a forward rate to their customers?
BALANCE SHEET OF BANK A (S IN MILLIONS) ASSETS LIABILITIES and NET WORTH Reserves (Cash/Reserves at Fed) 550 Demand Deposits $100 Losns 20 Govt. Securities 90 Net Worth (Owners' Equity) What is the net worth of this bank? 2. If the required reserve is 10%, what is the amount of REQUIRED RESERVES that this bank must bold? 3. What then is the mount of EXCESS RESERVES that this bank is now holding? How much does this bank have available for NEW LOANS? 5. If the required reserve is increased to 20%, whal is the amount of REQUIRED RESERVES that this bank must bold?
1. You deposit $100 of currency into your account. Explain what happens to reserves , checkabledeposits, and monetary base? 2. Explain what the shadow banking system is and how it works. 3. Your bank has the following balance sheet:Assets LiabilitiesReserves $70 million Checkable deposits $200 millionSecurities $50 millionLoans $130 million Bank capital $50 millionIf the required reserve ratio is 10%, what actions should the bank manager take if there is anunexpected deposit outflow of $50 million? Explain your answer. 4. Explain and demonstrate graphically that if the central bank pursues targeting a monetaryaggregate, it is likely to lose control over the interest rate. 5. In the market for reserves, the federal funds rate is equal to the interest rate paid on excessreserves. Explain and demonstrate graphically the effect of an open market sale on the federalfunds rate.
Table 10-2 Last Bank of Cedar Bend Assets: Reserves Loans Liabilities: $25 000 Deposits $180 000 S155 000 efer to the Table 10-2. If the reserve requirement is 10 percent and then someone deposits $50 000 into the bank, what is the bank's reserve osition? alect one: cross a. It will have $52 000 in excess reserves. cros b. It will need to raise reserves by $5000. cros c. It will have $57 000 in excess reserves. d. It will have excess reserves of $2000.
Your uncle repays a $100 loan from Tenth NationalBank (TNB) by writing a $100 check from his TNBchecking account. Use T-accounts to show the effectof this transaction on your uncle and on TNB. Hasyour uncle’s wealth changed? Explain.
Honie Times New Roman 12 Styles Editing Edito aste Paragraph E Styles Edito oboard Font 5. 204.8 40.96 163.84 163.84 163.84 6. 163.84 32.76 131.07 131.07 131.07 7. 131.07 26.21 104.85 104.85 104.85 8 104.85 20.97 83.88 83.88 83.88 9. 83.88 16.78 67.1 67.1 67.1 10 67.1 13.42 53.68 53.68 53.68 Totals 2231.54 446.3 1785.22 1785.22 1785.22 b. Calculate the new money supply. (Enter response here.) c. Calculate the money multiplıer. (Enter response here.) Fage 3 of 7 D Focus 尾 1356 words maiorindustries of PalamnósSomelof those corks likely ended in stonning bottiles fromith P Type here to search O f2 f5 f6 40 23 %24 &
Table 29-3 The First Bank of Roswell Assets Liabilities Reserves $30,000 Deposits $200,000 Loans 170,000 Refer to Table 29-5. Suppose the bank faces a reserve requirement of 10 percent. Starting from the situation as depicted by the T-account, a customer deposits an additional $60,000 into his account at the bank. If the bank takes no other action it will a. be unable to make any new loans. b. be in a position to make new loans equal to a maximum of $6,000. c. have $4,000 in excess reserves. d. have $64,000 in excess reserves.
suppose the reserve requirement is 10 percent and the balance sheet of the peoples national bank looks like the accompanying example.ASSETSvault cash - $20,000deposits at fed - 30,000securities - 45,000loans - 120,000LIABILITIESchecking deposits - $200,000net worth - 15,000answer the following:A. what are the required reserves of people national bank? does the bank have any excess reserves?B. what is the maximum loan that the bank could extend?C. indicate how the banks balance sheet would be altered if it extended this loan.D. suppose that the required reserves were 20 percent. if this were the case, would the bank be in a position to extend any additional loans? explain
How much money do you have to put into a bank account that pays 10% interest compounded annually to have 10,000 in ten years?
Humongous Bank is the only bank in the economy. The people in this economy have 20 million in money, and they deposit all their money in Humongous Bank. Humongous Bank decides on a policy of holding 100 reserves. Draw a T-account for the bank. Humongous Bank is required to hold 5 of its existing 20 million as reserves, and to loan out the rest. Draw a T-account for the bank after it has made its first round of loans. Assume that Humongous bank is part of a multibank system. How much will money supply increase with that original 19 million loan?
Explain why think the Federal Reserve Bank tracks M1 and M2.

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