need answers for part b)

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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need answers for part b) 

Suppose the balance sheet of Bigfoot Bank of America is shown below:
Assets
Liabilities
Reserves $100
Deposits $5000
Loans $4900
a) The Reserve Requirement Ratio (RRR) is 0.04 or 4%. What is the Money Multiplier?
b) Suppose that Skitch brings in a deposit of $300. What will be the new Deposits,
Reserves and Loans amounts immediately after this deposit? Does the bank have any
Excess Reserves at this point? How much? Show your work.
Deposits =
Reserves
Loans
Excess Reserves =
c) What will be the Deposits, Reserves and Loans amounts after the entire money
creation process has been completed. Show your work.
Deposits =
Reserves =
Loans =
Transcribed Image Text:Suppose the balance sheet of Bigfoot Bank of America is shown below: Assets Liabilities Reserves $100 Deposits $5000 Loans $4900 a) The Reserve Requirement Ratio (RRR) is 0.04 or 4%. What is the Money Multiplier? b) Suppose that Skitch brings in a deposit of $300. What will be the new Deposits, Reserves and Loans amounts immediately after this deposit? Does the bank have any Excess Reserves at this point? How much? Show your work. Deposits = Reserves Loans Excess Reserves = c) What will be the Deposits, Reserves and Loans amounts after the entire money creation process has been completed. Show your work. Deposits = Reserves = Loans =
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