Assume that the required reserve ratio is 7.00%. The bank manager decides to lend Billy Bob Smith all of the bank's excess reserves. Billy Bob takes the funds to Eula Mae's Used Machines and buys a pickup truck. Eula Mae then deposits the money in her account back at the Smithville Bank. Table 2 should show the bank's accounts after the loan is made and the funds again deposited. Round all answers to the nearest cent. What are the bank's loans in Table 2? What are the bank's reserves in Table 2? What are the bank's deposits in Table 2? Table 1. Original Assets and Liabilities $ $ Assets $ reserves: $3201.00 Table 2. Assets and Liabilities After Bank Makes a Loan Assets reserves: ? Liabilities loans: ? deposits: $3201.00 Liabilities deposits: ?
Assume that the required reserve ratio is 7.00%. The bank manager decides to lend Billy Bob Smith all of the bank's excess reserves. Billy Bob takes the funds to Eula Mae's Used Machines and buys a pickup truck. Eula Mae then deposits the money in her account back at the Smithville Bank. Table 2 should show the bank's accounts after the loan is made and the funds again deposited. Round all answers to the nearest cent. What are the bank's loans in Table 2? What are the bank's reserves in Table 2? What are the bank's deposits in Table 2? Table 1. Original Assets and Liabilities $ $ Assets $ reserves: $3201.00 Table 2. Assets and Liabilities After Bank Makes a Loan Assets reserves: ? Liabilities loans: ? deposits: $3201.00 Liabilities deposits: ?
Chapter14: Banking And The Money Supply
Section: Chapter Questions
Problem 3.4P
Related questions
Question
Transcribed Image Text:Assume that the required reserve ratio is 7.00%.
The bank manager decides to lend Billy Bob Smith all of the
bank's excess reserves. Billy Bob takes the funds to Eula
Mae's Used Machines and buys a pickup truck. Eula Mae
then deposits the money in her account back at the
Smithville Bank.
Table 2 should show the bank's accounts after the loan is
made and the funds again deposited. Round all answers to the
nearest cent.
What are the bank's loans in Table 2?
What are the bank's reserves in Table 2?
What are the bank's deposits in Table 2?
Table 1. Original Assets and Liabilities
$
$
Assets
$
reserves: $3201.00
Table 2. Assets and Liabilities After Bank Makes
a Loan
Assets
reserves: ?
Liabilities
loans: ?
deposits: $3201.00
Liabilities
deposits: ?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
