Based on the T Chart, if The FED Bought $1,000 in Bonds from this bank what numbers would change? I Assets Liabilities and Equity $20,000 Required Reserves(Vault) $2,000 Demand Deposits Excess Reserves (Loanable Funds) $3,000 Business Loans $5,000 Student Loans $10,000 Government Securities $5,000 Owner's Equity $5,000 Total Assets Total Liability $25,000 $25,000

Based on the T Chart, if The FED Bought $1,000 in Bonds from this bank what numbers would change? I Assets Liabilities and Equity $20,000 Required Reserves(Vault) $2,000 Demand Deposits Excess Reserves (Loanable Funds) $3,000 Business Loans $5,000 Student Loans $10,000 Government Securities $5,000 Owner's Equity $5,000 Total Assets Total Liability $25,000 $25,000

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter19: Money Creation

Section: Chapter Questions

Problem 2SQ

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Similar questions

A bank has deposits of 400. It holds reserves of 50. It has purchased government bonds worth 70. It has made loans of 500. Set up a T-account balance sheet for the bank, with assets and liabilities, and calculate the banks net worth.
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What is the risk if a bank does not diversify its loans?
BALANCE SHEET OF BANK A (S IN MILLIONS) ASSETS LIABILITIES and NET WORTH Reserves (Cash/Reserves at Fed) 550 Demand Deposits $100 Losns 20 Govt. Securities 90 Net Worth (Owners' Equity) What is the net worth of this bank? 2. If the required reserve is 10%, what is the amount of REQUIRED RESERVES that this bank must bold? 3. What then is the mount of EXCESS RESERVES that this bank is now holding? How much does this bank have available for NEW LOANS? 5. If the required reserve is increased to 20%, whal is the amount of REQUIRED RESERVES that this bank must bold?
Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 44Deposits 255Loans 155 Securities 51Other $X Using the balance sheet above, find the level of excess reserves this bank is holding if the required reserve ratio = 6%(Give answers to 2 decimal places as needed)
Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 42Deposits 245Loans 160 Securities 48Other $X Using the balance sheet above, find the level of required reserves for this bank if the required reserve ratio = 8%(Give answers to 2 decimal places as needed)
c and d Balance sheet of the Winter Bank Assets Liabilities Cash $ 8,000 Deposited with the Fed $ 4,000 Loans $ 138,000 Deposits $ 100,000 Capital $ 50,000 Total $ 150,000 Total $ 150,000 The required reserve ratio on all deposits is 10% a. What, if any, are this bank's excess reserves? b. How much new amount of loan will this bank be able to create because of the excess reserves? c. How much new amount of loan will the entire banking system be able to create because of this excess reserves? d. Answer part a, b and c if the required reserve ratio is changed to 8%.
Use the information given in Upper Midwest National Bank's balance sheet to answer the following questions. Assets Reserves Loans Securities Bank's Balance Sheet $150 $600 Liabilities and Owners' Equity $1,200 Deposits Debt $750 Capital (owners' equity) Suppose a new customer adds $100 to his account at Upper Midwest National Bank, which the owners of the bank then use to make $100 worth of new loans. This would increase the loans account and the account. $200 This would also bring the leverage ratio from its initial value of The riskiness of each asset $100 The total value of liabilities Which of the following do bankers consider when deciding how to allocate their assets? Check all that apply. The size of the monetary base to a new value of
2. Assets Liabilities Total Reserves 2,000,000 Transaction Deposits Required Excess Govt. Sec. 2,225,000 Loans Total Assets Total Liabilities a. Assume the required reserve rate is 20%. What are required reserves for this bank? b. What are transactions deposits and total liabilities for the bank? c. How much more money can this bank loan out at this time? Wells Fargo Bank 750,000
Last Bank of Panorama Springs Assets: Liabilities: Reserves $25.00 Deposits $175.00 Loans $150.00 If the reserve requirement is 12 percent, what is the state of this bank? a. It has excess reserves of more than $5000. b. It has excess reserves of less than $5000. c. It has less reserves than required. d. It can make a new loan of $17,500.
Part 2 - Practice- Use the balance sheet for Leon’s Bank below to answer the following questions. Assets Liabilitis Required reserves $1,000 Demand deposits $10,000 Excess reserves $0 Owner’s equity $10,000 Customer loans $8,000 Government securities (bonds) $7,000 Building and fixtures $4,000 1. Calculate the required reserve ratio. Explain how you got your answer. 2. Suppose that an individual deposits $5,000 of cash into her checking account. What is the immediate effect of the cash deposit on the M1 measure of the money supply? Explain. 3. What is the dollar value of the bank’s required reserves after the $5,000 deposit in question #7? Explain. 4. What is the dollar value of the bank’s excess reserves after the $5,000 deposit in question #7? Explain. 5. Calculate the maximum amount that the money supply can change as a result of the $5,000 deposit in question #7. Show your work.