Assume that a customer deposits $1000 in her bank. Show in a T-account the effect of this deposit. If the bank is subject to reserve requirements (as some bank in other countries are), show in a second T-account the banks balance sheet indicating required and excess reserves, assuming a 5 percent required reserve ratio. In a third T-account, show the change in the bank's balance sheet when the bank makes loans with the excess reserves.
Assume that a customer deposits $1000 in her bank. Show in a T-account the effect of this deposit. If the bank is subject to reserve requirements (as some bank in other countries are), show in a second T-account the banks balance sheet indicating required and excess reserves, assuming a 5 percent required reserve ratio. In a third T-account, show the change in the bank's balance sheet when the bank makes loans with the excess reserves.
Chapter14: Banking And The Money Supply
Section: Chapter Questions
Problem 2.3P
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Assume that a customer deposits $1000 in her bank. Show in a T-account the effect of this deposit. If the bank is subject to reserve requirements (as some bank in other countries are), show in a second T-account the banks balance sheet indicating required and
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