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The table below is the current balance sheet for the Maple Leafs Bank. Answer the following questions assuming that the bank's target reserve ratio is 10%. Reserves Loans Assets Securities Fixed assets Total $120,000 $ 680,000 250,000 350,000 $1,400,000 (1) Reserves $ (2) $1,200,000 $ Liabilities / Equity Demand deposits Shareholders equity Total < Prev a. This bank is over-reserved by $30,000 b. Suppose that a loan, in the amount of the excess reserves found in part (a), is made to Sats Mundin. Show the resulting balance sheet in columns (1) in the table above. Suppose that Sats immediately spends all of his loan by writing a cheque to his psychologist, Freda Freud. She deposits it in her account, which happens to also be at the Maple Leafs Bank. The bank is now over-reserved by $30,000 d. Suppose, instead, that the bank makes a loan for the amount in your answer in part (a), which then clears against the Maple Leafs Bank. Show the resulting balance sheet in columns (2) in the table above. e. The Bank now has excess reserves of $0. 4 Suppose that there are a total of 9 other banks in the economy and that the balance sheet for the whole banking system is presented in the table below. Assume that each of the other banks also has a target reserve ratio of 10%. Assets (1 a11) Liabilities / Equity Demand deposits 11 of 14 www ww $900,000 $ 500,000 $9,000,000 $1,400,000 Next > $ (1 all) (1) $ (2) C Assume that x - с A COMPANY About Chagg Chegg For Good

The table below is the current balance sheet for the Maple Leafs Bank. Answer the following questions assuming that the bank's target reserve ratio is 10%. Reserves Loans Assets Securities Fixed assets Total $120,000 $ 680,000 250,000 350,000 $1,400,000 (1) Reserves $ (2) $1,200,000 $ Liabilities / Equity Demand deposits Shareholders equity Total < Prev a. This bank is over-reserved by $30,000 b. Suppose that a loan, in the amount of the excess reserves found in part (a), is made to Sats Mundin. Show the resulting balance sheet in columns (1) in the table above. Suppose that Sats immediately spends all of his loan by writing a cheque to his psychologist, Freda Freud. She deposits it in her account, which happens to also be at the Maple Leafs Bank. The bank is now over-reserved by $30,000 d. Suppose, instead, that the bank makes a loan for the amount in your answer in part (a), which then clears against the Maple Leafs Bank. Show the resulting balance sheet in columns (2) in the table above. e. The Bank now has excess reserves of $0. 4 Suppose that there are a total of 9 other banks in the economy and that the balance sheet for the whole banking system is presented in the table below. Assume that each of the other banks also has a target reserve ratio of 10%. Assets (1 a11) Liabilities / Equity Demand deposits 11 of 14 www ww $900,000 $ 500,000 $9,000,000 $1,400,000 Next > $ (1 all) (1) $ (2) C Assume that x - с A COMPANY About Chagg Chegg For Good

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter16: Information, Risk, And Insurance
Section: Chapter Questions
Problem 8RQ: What are some ways that someone looking for a loan might reassure a bank that is faced with...
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CH7,8,9) The table below is the current balance sheet for the Maple Leafs Bank. Answer the following questions assuming that the bank's target reserve ratio is 10%. TR Reserves Loans Assets Securities Fixed assets Total a. This bank is over-reserved $120,000 $ 680,000 250,000 350,000 $1,400,000 (1) e. The Bank now has excess reserves of $ $[ Reserves $ $1,200,000 (2) $ Saved by $30,000 b. Suppose that a loan, in the amount of the excess reserves found in part (a), is made to Sats Mundin. Show the resulting balance sheet in columns (1) in the table above. c. Suppose that Sats immediately spends all of his loan by writing a cheque to his psychologist, Freda Freud. She deposits it in her account, which happens to also be at the Maple Leafs Bank. The bank is now over-reserved by $30,000 d. Suppose, instead, that the bank makes a loan for the amount in your answer in part (a), which then clears against the Maple Leafs Bank. Show the resulting balance sheet in columns (2) in the table above. 0. 4 Suppose that there are a total of 9 other banks in the economy and that the balance sheet for the whole banking system is presented in the table below. Assume that each of the other banks also has a target reserve ratio of 10%. Assets (1 all) < Prev Liabilities/ Equity Demand deposits Shareholders' equity Total O Search Liabilities / Equity Demand deposits 11 of 14 www www www 445 SAMSUNG → $900,000 $ 500,000 $9,000,000 $1,400,000 Next > $ (1 all) (1) (2) C Assume that x C ← Help The PayPal chegg.com COMPANY About Chugg Chegg For Good College Marketing Corporate Development Jobs Join Our Affilate Program Media Center
Transcribed Image Text:CH7,8,9) The table below is the current balance sheet for the Maple Leafs Bank. Answer the following questions assuming that the bank's target reserve ratio is 10%. TR Reserves Loans Assets Securities Fixed assets Total a. This bank is over-reserved $120,000 $ 680,000 250,000 350,000 $1,400,000 (1) e. The Bank now has excess reserves of $ $[ Reserves $ $1,200,000 (2) $ Saved by $30,000 b. Suppose that a loan, in the amount of the excess reserves found in part (a), is made to Sats Mundin. Show the resulting balance sheet in columns (1) in the table above. c. Suppose that Sats immediately spends all of his loan by writing a cheque to his psychologist, Freda Freud. She deposits it in her account, which happens to also be at the Maple Leafs Bank. The bank is now over-reserved by $30,000 d. Suppose, instead, that the bank makes a loan for the amount in your answer in part (a), which then clears against the Maple Leafs Bank. Show the resulting balance sheet in columns (2) in the table above. 0. 4 Suppose that there are a total of 9 other banks in the economy and that the balance sheet for the whole banking system is presented in the table below. Assume that each of the other banks also has a target reserve ratio of 10%. Assets (1 all) < Prev Liabilities/ Equity Demand deposits Shareholders' equity Total O Search Liabilities / Equity Demand deposits 11 of 14 www www www 445 SAMSUNG → $900,000 $ 500,000 $9,000,000 $1,400,000 Next > $ (1 all) (1) (2) C Assume that x C ← Help The PayPal chegg.com COMPANY About Chugg Chegg For Good College Marketing Corporate Development Jobs Join Our Affilate Program Media Center
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