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SCENARIO 10.2: The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up. New Deposit Required Reserve $100,000.00 Loans Bank No. 1 Bank No. 2 Bank No. 3 Bank No. 4 $10,000.00 $9,000.00 $8,100.00 $7,290.00 $90,000.00 $81.000.00 $72O00 $65,610.00 $90,000.00 $81,000.00 $72,900.00 Refer to Scenario 10.2. If the required reserve ratio were changed to 20%, total loans of Bank No. 2 will change to Select one: a. $72,000. b. $64,000. c. $80,000. d. $74,250.

SCENARIO 10.2: The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up. New Deposit Required Reserve $100,000.00 Loans Bank No. 1 Bank No. 2 Bank No. 3 Bank No. 4 $10,000.00 $9,000.00 $8,100.00 $7,290.00 $90,000.00 $81.000.00 $72O00 $65,610.00 $90,000.00 $81,000.00 $72,900.00 Refer to Scenario 10.2. If the required reserve ratio were changed to 20%, total loans of Bank No. 2 will change to Select one: a. $72,000. b. $64,000. c. $80,000. d. $74,250.

Economics (MindTap Course List)
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter12: Money, Banking And The Financial System
Section12.3: How Banking Developed
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SCENARIO 10.2: The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up. New Deposit Required Reserve $100,000.00 $90,000.00 $81,000.00 Loans $90,000.00 $81000.00 $72.O00 $65,610.00 Bank No. 1 $10,000.00 Bank No. 2 $9,000.00 Bank No. 3 Bank No. 4 $8,100.00 $7,290.00 $72, 900.00 Refer to Scenario 10.2. If the required reserve ratio were changed to 20%, total loans of Bank No. 2 will change to Select one: a. $72,000. b. $64,000. c. $80,000. d. $74,250.
Transcribed Image Text:SCENARIO 10.2: The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up. New Deposit Required Reserve $100,000.00 $90,000.00 $81,000.00 Loans $90,000.00 $81000.00 $72.O00 $65,610.00 Bank No. 1 $10,000.00 Bank No. 2 $9,000.00 Bank No. 3 Bank No. 4 $8,100.00 $7,290.00 $72, 900.00 Refer to Scenario 10.2. If the required reserve ratio were changed to 20%, total loans of Bank No. 2 will change to Select one: a. $72,000. b. $64,000. c. $80,000. d. $74,250.
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