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28 Sep 2019
Suppose Bank A, which faces a reserve requirement of 10 percent,receives a $1,000 deposit from a customer.
a.Assuming that it wishes to hold no excess reserves, determine howmuch the bank should lend. Show your answer on Aâs balancesheet.
b.Assuming that the loan shown in Bank Aâs balance sheet isredeposited in Bank B, show the changes in Bank Bâs balance sheetif it lends out the maximum possible.
c.Repeat this process for three additional banks: C, D, andE.
d.Using the simple money multiplier, calculate the total change inthe money supply resulting from the $1,000 initial deposit.
e.Assume Banks A, B, C, D and E each wish to hold 5 percent excessreserves. How would holding this level of excess resrves affect thetotal change in the money supply.
Suppose Bank A, which faces a reserve requirement of 10 percent,receives a $1,000 deposit from a customer.
a.Assuming that it wishes to hold no excess reserves, determine howmuch the bank should lend. Show your answer on Aâs balancesheet.
b.Assuming that the loan shown in Bank Aâs balance sheet isredeposited in Bank B, show the changes in Bank Bâs balance sheetif it lends out the maximum possible.
c.Repeat this process for three additional banks: C, D, andE.
d.Using the simple money multiplier, calculate the total change inthe money supply resulting from the $1,000 initial deposit.
e.Assume Banks A, B, C, D and E each wish to hold 5 percent excessreserves. How would holding this level of excess resrves affect thetotal change in the money supply.
a.Assuming that it wishes to hold no excess reserves, determine howmuch the bank should lend. Show your answer on Aâs balancesheet.
b.Assuming that the loan shown in Bank Aâs balance sheet isredeposited in Bank B, show the changes in Bank Bâs balance sheetif it lends out the maximum possible.
c.Repeat this process for three additional banks: C, D, andE.
d.Using the simple money multiplier, calculate the total change inthe money supply resulting from the $1,000 initial deposit.
e.Assume Banks A, B, C, D and E each wish to hold 5 percent excessreserves. How would holding this level of excess resrves affect thetotal change in the money supply.
Retselisitsoe PokothoaneLv10
28 Sep 2019