8. Refer to the T-account below for the following questions. Assets Liabilities Loans $32,000 Deposits $40,000 Required reserves $2,000 Excess reserves $ 6,000 a. What is the required reserve ratio? b. What is the money multiplier? c. What happens to the monetary base right after the bank loans out all of their excess reserves (before they are deposited into a bank)? d. If the bank decides to loan out all of their excess reserves, by how much does the money supply change in total?
8. Refer to the T-account below for the following questions. Assets Liabilities Loans $32,000 Deposits $40,000 Required reserves $2,000 Excess reserves $ 6,000 a. What is the required reserve ratio? b. What is the money multiplier? c. What happens to the monetary base right after the bank loans out all of their excess reserves (before they are deposited into a bank)? d. If the bank decides to loan out all of their excess reserves, by how much does the money supply change in total?
Chapter14: Banking And The Money Supply
Section: Chapter Questions
Problem 3.5P
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