The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of 8%. Liabilities/Equity Demand Deposits Assets Reserves $117,000 s $1, 350,000 Loans 1,880, 000 Shareholders' equity 150,000 Securities 150,000 Fixed assets 153,000 Total 1,500,000 Total 1,500, 000 a. The amount of excess reserves is $ b. The maximum amount that loans and deposits could be increased by is $| c. Assume that the system becomes fully loaned up. Show the new balance sheet in the table above. d. Now that the system is fully loaned up, the money supply will have increased by $|

The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of 8%. Liabilities/Equity Demand Deposits Assets Reserves $117,000 s $1, 350,000 Loans 1,880, 000 Shareholders' equity 150,000 Securities 150,000 Fixed assets 153,000 Total 1,500,000 Total 1,500, 000 a. The amount of excess reserves is $ b. The maximum amount that loans and deposits could be increased by is $| c. Assume that the system becomes fully loaned up. Show the new balance sheet in the table above. d. Now that the system is fully loaned up, the money supply will have increased by $|

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: The Monetary System

Section: Chapter Questions

Problem 5PA

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