Suppose that Kesha deposits $7,000 into her savings account at First Bank. The reserve requirement facing First Bank is 8%.Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign.a. Use this information to show how First Bank's assets and liabilities initially change when Kesha deposits the $7,000 in the bank.A Simple Bank Balance SheetAssetsChange in Reserves: $LiabilitiesChange in Deposits: $b. How much money can First Bank lend out to other people?$c. Now suppose that First Bank holds no excess reserves and lends out all of the excess reserves resulting from Kesha's deposit. Howdo First Bank's assets and liabilities change?A Simple Bank Balance SheetAssetsChange in Reserves: $Change in Loans: $Liabilitiesn

Legally, commercial banks may be compelled to hold a portion of deposits received as reserves,…

ings account at First Bank. The reserve requirement facing First Bank Is 8%. structions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. Use this information to show how First Bank's assets and liabilities initially change when Kesha deposits the $7,000 in the bank. Simple Bank Balance Sheet Assets Change in Reserves: $ Liabilities Change in Deposits: $ How much money can First Bank lend out to other people? $ Now suppose that First Bank holds no excess reserves and lends out all of the excess reserves resulting from Kesha's deposit. How First Bank's assets and liabilities change? Simple Bank Balance Sheet Assets Change in Reserves: $ Change in Loans: $ Liabilities

ings account at First Bank. The reserve requirement facing First Bank Is 8%. structions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. Use this information to show how First Bank's assets and liabilities initially change when Kesha deposits the $7,000 in the bank. Simple Bank Balance Sheet Assets Change in Reserves: $ Liabilities Change in Deposits: $ How much money can First Bank lend out to other people? $ Now suppose that First Bank holds no excess reserves and lends out all of the excess reserves resulting from Kesha's deposit. How First Bank's assets and liabilities change? Simple Bank Balance Sheet Assets Change in Reserves: $ Change in Loans: $ Liabilities

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter14: Banking And The Money Supply

Section: Chapter Questions

Problem 3.4P

See similar textbooks

Similar questions

Humongous Bank is the only bank in the economy. The people in this economy have 20 million in money, and they deposit all their money in Humongous Bank. Humongous Bank decides on a policy of holding 100 reserves. Draw a T-account for the bank. Humongous Bank is required to hold 5 of its existing 20 million as reserves, and to loan out the rest. Draw a T-account for the bank after it has made its first round of loans. Assume that Humongous bank is part of a multibank system. How much will money supply increase with that original 19 million loan?
Why might banks want to hold excess reserves in time of recession?
Suppose that Kesha deposits $8,000 into her savings account at First Bank. The reserve requirement facing First Bank Is 20%. Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. a. Use this information to show how First Bank's assets and liabilities Initially change when Kesha deposits the $8,000 in the bank. A Simple Bank Balance Sheet Assets Change in Reserves: $ Liabilities Change in Deposits: $ b. How much money can First Bank lend out to other people? $ c. Now suppose that First Bank holds no excess reserves and lends out all of the excess reserves resulting from Kesha's deposit. How do First Bank's assets and liabilities change? A Simple Bank Balance Sheet Assets Change in Reserves: $ Change in Loans: $ Liabilities
Suppose that Kesha deposits $7,000 into her savings account at First Bank. The reserve requirement facing First Bank is 9%. Instructions: Enter your answer as a whole number, If you are entering a negative number include a minus sign. a. Use this information to show how First Bank's assets and liabilities Initially change when Kesha deposits the $7000 in the bank. A Simple Bank Balance Sheet Assets Liabilities Change in Reserves: $ Change in Deposits: $ b. How much money can First Bank lend out to other people? c. Now suppose that First Bank holds no excess reserves and lends out all of the excess reserves resulting from Kesha's deposit. How do First Bank's assets and labilities change? A Simple Bank Balance Sheet Assets Liabilities Change in Reservesi Change in Loans