I need the answer to part e. Thank you! In answering the question, you should emphasize the line of reasoning that generated your results; it isnot enough to list the results of your analysis. Include correctly labeled diagrams, if useful or required,in explaining your answer. A correctly labeled diagram must have all axes and curves clearly labeledand must show directional changes.1.The Bank of Uchenna has the following balance sheet.AssetsLiabilities and EquityReserves$30,000 Demand deposits$100,000LoansS70,000Property$2,000 Equity (net worth)$2,000Assume that the reserve requirement ratio is 20 percent.a. Calculate the dollar value of the reserves that the Bank of Uchenna is required to hold.b. Given the current reserves, calculate the maximum value of additional loans that the Bank ofUchenna can make.c. Assume that Elike raises $5,000 in cash from a yard sale and deposits the cash in his checkingaccount at the Bank of Uchenna. By how much does the money supply immediately change as aresult of Elike's deposit?d. Calculate the maximum change in demand deposits in the banking system as a whole resultingfrom Elike's deposit.e. If the Bank of Uchenna is not meeting its reserve requirement, what action can it take to meet thereserve requirement without calling in loans or selling property?

Brief about above parts- Dollar value of Reserve = 20% of deposit = 20% of $100000 = $20000 Here the…

Answered: e. If the Bank of Uchenna is not…

e. If the Bank of Uchenna is not meeting its reserve requirement, what action can it take to meet the reserve requirement without calling in loans or selling property?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter17: Financial Markets

Section: Chapter Questions

Problem 1SCQ: Answer these three questions about early-stage corporate finance: Why do very small companies tend...

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