CategoryTotal Reserves(asset for private banks, kept at Federal Reserve)Currency(assets for firms, households)Value of Euros in the U.S.(assets for private banks, firms, households, etc.)U.S. Gov't bonds(assets for private banks, firms, households, etc.)Demand deposits(liability for private banks)Corporate and consumer loans(asset for private banks)Mortgage loans(asset for private banks)Certificates of Deposit, CDs(liability for private banks)Reserve requirement on demand deposits$100 Billion$50 Billion$1 Billion$30 Billion$1 Trillion$400 Billion$485 Billion$10 Billion1) Given the above data about the U.S. economy (assume anything not listed is equal to zero):a. What is the money supply (M1)?b.What is the total amount (in $) of reserves that banks are legally required to keep?c.What is the total amount (in $) of reserves that banks have on hand to lend?

In macroeconomics, the money supply refers to the total volume of currency held by the public at a…

1) Given the above data about the U.S. economy (assume anything not listed is equal to zero): a What is the money supply (M1)? b. What is the total amount (in $) of reserves that banks are legally required to keep? C. What is the total amount (in $) of reserves that banks have on hand to lend?

1) Given the above data about the U.S. economy (assume anything not listed is equal to zero): a What is the money supply (M1)? b. What is the total amount (in $) of reserves that banks are legally required to keep? C. What is the total amount (in $) of reserves that banks have on hand to lend?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter27: Money And Banking

Section: Chapter Questions

Problem 30P: A bank has deposits of 400. It holds reserves of 50. It has purchased government bonds worth 70. It...

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Question

Category
Total Reserves
(asset for private banks, kept at Federal Reserve)
Currency
(assets for firms, households)
Value of Euros in the U.S.
(assets for private banks, firms, households, etc.)
U.S. Gov't bonds
(assets for private banks, firms, households, etc.)
Demand deposits
(liability for private banks)
Corporate and consumer loans
(asset for private banks)
Mortgage loans
(asset for private banks)
Certificates of Deposit, CDs
(liability for private banks)
Reserve requirement on demand deposits
$100 Billion
$50 Billion
$1 Billion
$30 Billion
$1 Trillion
$400 Billion
$485 Billion
$10 Billion
1) Given the above data about the U.S. economy (assume anything not listed is equal to zero):
a. What is the money supply (M1)?
b.
What is the total amount (in $) of reserves that banks are legally required to keep?
c.
What is the total amount (in $) of reserves that banks have on hand to lend?

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First National Bank Assets Liabilities and Net Worth US Treasury Bonds $450,000 Net Worth $500,000 Reserves (Cash) $175,000 Checkable Deposits $250,000 Loans $125,000 Second National Bank Assets Liabilities and Net Worth US Treasury Bonds $100,000 Net Worth $250,000 Reserves (Cash) $250,000 Checkable Deposits $100,000 Third National Bank Liabilities and Net Worth Assets US Treasury Bonds $900,000 Net Worth $1,000,000 Reserves (Cash) $350,000 Checkable Deposits $500,000 Loans $250,000 The required reserve ratio is 25% for all banks. Second National Bank is capable of loaning $ (Do NOT enter the '$' in your response. Enter a whole dollar amount; do NOT enter cents.) to its customers. Blank 1