Which of the following statements conceming the changes that occur is corret if you were to make a $ 200 depost nto your chequing accourt a YourBank? The OA YourBank has assets of desired reserves = $20; excess reserves - $180; and liebilies of chequable deposits of $ 200. O B. YourBank has assets of chequable deposits of $ 200; assots desired reserves = $20; and excess reserves of $180. O C. YourBank has assets of desired reserves -$180; excess reseorvos = $20; and liabilities of chequable deposits of $ 200. O D. YourBank has assets of chequable deposits of $ 200; assets desired reserves $180; and excess reserves of $20.

Which of the following statements conceming the changes that occur is corret if you were to make a $ 200 depost nto your chequing accourt a YourBank? The OA YourBank has assets of desired reserves = $20; excess reserves - $180; and liebilies of chequable deposits of $ 200. O B. YourBank has assets of chequable deposits of $ 200; assots desired reserves = $20; and excess reserves of $180. O C. YourBank has assets of desired reserves -$180; excess reseorvos = $20; and liabilities of chequable deposits of $ 200. O D. YourBank has assets of chequable deposits of $ 200; assets desired reserves $180; and excess reserves of $20.

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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When a bank suffers deposit outflows and has no excess reserves, the bank will generally first try to raise the funds by O A. calling in some loans. B. borrowing from the Fed. C. selling some of its securities. D. selling some loans. Suppose that a bank has $80 in checkable deposits, reserves of $15, and a reserve requirement of 10%. Also assume that the the bank suffers a $10 deposit outflow. If the bank chooses to borrow from the Fed to meet its reserve requirement, then the bank would need to borrow $. (Round your response to the nearest two decimal place.)
Bank A has $5,000 in reserves, all required to be held. The required reserve ratio is 10 percent. Bank A has checkable deposits of O $500. O $5,000. O $50,000. O $500,000.
4. a) Suppose that Tk.10,000 in new taka bills (never seen before) falls magically from the sky into your hands. What are the minimum increase and the maximum increase in the money supply that may result? Assume the required reserve ratio is 10 percent.b) Suppose you receive Tk. 10,000 from your grandmother and deposits the money in a saving account. your grandmother gave you the money by writing a check on her saving account. Would the maximum increase in the money supply still be what you found it to be in part a) where you received the money from the sky? Why or why not?c) Suppose that instead you getting Tk. 10,000 from the sky or a check through your grandmother, you get the money from your mother who had buried it in a can in her backyard. In this case, would the maximum increase in the money supply be what you found it to be in part a)? Why or why not?
§Suppose that the T-account for First National Bank is as follows: Assets Liabilities Reserves: 90.000-TL Deposits: 500.000-TL Loans: 410.000-TL § §If the Central Bank requires banks to hold 10% of deposits as reserves, how much in excess reserves does First National Bank now hold? MM=1/rr MM=1/(10/100) MM=10 40000*10=400000TL §Assume that all other banks hold only the required amount of reserves. If First National decides to reduce its reserves to only the required amount, by how much would the economy’s money supply increases?
Suppose that National bank has $36 million in checkable deposits, Commonwealth bank has $45 million in checkable deposits and the required reserve ratio for checkable deposits is 10%. If the National bank has $4 million in reserves and Commonwealth has $5 million iin reserves, how much excess reserves does each bank have? Suppose that a customer of the National bank writies a check for $2 million to a real estate broker who deposits the check at Commonwealth bank. After the check clears, how much excess reserves does each bank have?
1. a) Suppose that Tk.10,000 in new taka bills (never seen before) falls magically from the sky into your hands. What are the minimum increase and the maximum increase in the money supply that may result? Assume the required reserve ratio is 10 percent. b) Suppose you receive Tk. 10,000 from your grandmother and deposits the money in a saving account. your grandmother gave you the money by writing a check on her saving account. Would the maximum increase in the money supply still be what you found it to be in part a) where you received the money from the sky? Why or why not? c) Suppose that instead you getting Tk. 10,000 from the sky or a check through your grandmother, you get the money from your mother who had buried it in a can in her backyard. In this case, would the maximum increase in the money supply be what you found it to be in part a)? Why or why not? 2. a) Suppose growth rate of Real GDP is 6% and the growth rate of velocity is 3%. If Bangladesh Bank wants to have a 5 %…
In Exhibit 5 if the required reserve ratio is 20 percentfor all banks and every bank in the banking systemloans out all of its excess reserves, then a $10,000deposit from Mr. Brown in checkable deposits couldcreate for the entire banking systema. $8,000 worth of new money.b. $2,000 worth of new money.c. $10,000 worth of new money.d. $40,000 worth of new money.
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The T-sheet below is for the Next to Last National Bank, a commercial bank. The required reserve ratio is 20% of deposits. (a) How much are excess reserves for this bank? (b) Suppose that this bank receives a deposit inflow of $20 million. Suppose also that you are certain that no deposit outflow will occur for several years and that the national economy will continue to grow. To maximize profits, what should you do? Show and explain the new T-sheet.
Assume that a bank has on its asset side reserves of 1000 and loans of 6000 and on its liability side deposits of 7000. Assume that the required reserve ratio is 10 percent. a. How much are its excess reserve.
Assume that the following data describe the current condition of the commercial banking system: Value Total reserves: $ 100 billion Transactions deposits: $ 800 billion Cash held by public: $ 300 billion Required reserve ratio: 0.10 Instructions: Enter your responses as a whole number. In part b, round your response to one decimal place. How large is the money supply (M1)? $ _____ billion How large are excess reserves? $ _____ billion Now assume that the public transfers $50 billion in cash into transactions accounts. 3. How much would the total lending capacity of the banking system be after this portfolio switch? $ ____ billion How large would the money supply be if the banks fully utilized their lending capacity? $ ____ billion
Activity in money markets increased significantly in the late 1970s and early 1980s because of O regulations that limited what banks could pay for deposits. O rising short-term interest rates. O both A and B of the above. O neither A nor B of the above.