For the next six questions, consider an economy with only two non-identical banks, called Bank One and Bank Two. In addition to this information, members of the public in this economy hold $6000 in cash, and there are no travelers' checks.
Partial balance sheet information for each bank is given below:
Bank One
Cash in bank $3500
Equity (net worth) $2150
US government bonds $1650
Total savings deposits $14,000
Deposit in the Federal Reserve $5000
Total checking deposits $54,000
Bank Two: US government bonds $950
Total checking deposits $46,000
Cash in bank $2000
Deposit in the Fed $4000
Equity $1850
Total savings deposits $11,000
Questions.... ( rr= 10% or .1)
1.) Economys monetary base combining actual and potential reserves?
2.) Money supply using simplified definition?
3.) Bank two required reserves?
4.) desired excess reserves ratio?
For the next six questions, consider an economy with only two non-identical banks, called Bank One and Bank Two. In addition to this information, members of the public in this economy hold $6000 in cash, and there are no travelers' checks.
Partial balance sheet information for each bank is given below:
Bank One
Cash in bank $3500
Equity (net worth) $2150
US government bonds $1650
Total savings deposits $14,000
Deposit in the Federal Reserve $5000
Total checking deposits $54,000
Bank Two: US government bonds $950
Total checking deposits $46,000
Cash in bank $2000
Deposit in the Fed $4000
Equity $1850
Total savings deposits $11,000
Questions.... ( rr= 10% or .1)
1.) Economys monetary base combining actual and potential reserves?
2.) Money supply using simplified definition?
3.) Bank two required reserves?
4.) desired excess reserves ratio?
