ReservesLoans=A. 250/0.16 $1,562.5B. 300/0.16 $1,875C. 500/0.17 = $2,941.18D. 300/0.196= $1,530.61O E. not enough information to determine=Bank North's Balance SheetAssets$300 DepositsCapital$1,800$2,100Refer to the table above. Assume that Bank North is operating at its target reserve ratio and has no excess reserves, andthat all commercial banks have the same target reserve ratio. If a new deposit to the Canadian banking system of $500 isdeposited at Bank North, the total new deposits created in the banking system can be calculated as follows:Liabilities$1,800$300$2,100

Given, Reserves = $300 Deposits = $1800 New deposit = $500 Reserve Ratio = (Reserves / Deposits) *…

5 Reserves Loans 18 0.61 Assets $300 $1,800 $2,100 Deposits Capital Liabilities Assume that Bank North is operating at its target reserve ratio and has no excess have the same target reserve ratio. If a new deposit to the Canadian banking sys he total new deposits created in the banking system can be calculated as follows $1,800 $300 $2,100

5 Reserves Loans 18 0.61 Assets $300 $1,800 $2,100 Deposits Capital Liabilities Assume that Bank North is operating at its target reserve ratio and has no excess have the same target reserve ratio. If a new deposit to the Canadian banking sys he total new deposits created in the banking system can be calculated as follows $1,800 $300 $2,100

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter14: Banking And The Money Supply

Section: Chapter Questions

Problem 2.3P

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