The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of 89 Assets Reserves Loans Securities Fixed assets Total $117,000 $ 117000 1,080,000 150,000 153,000 1,500,000 150000 153000 Liabilities/Equity Demand Deposits Shareholders' equity 9000 Total $1,350,000 $ 150,000 1,500,000 150000 a. The amount of excess reserves is $ b. The maximum amount that loans and deposits could be increased by is $ c. Assume that the system becomes fully loaned up. Show the new balance sheet in the table above. d. Now that the system is fully loaned up, the money supply will have increased by $
The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of 89 Assets Reserves Loans Securities Fixed assets Total $117,000 $ 117000 1,080,000 150,000 153,000 1,500,000 150000 153000 Liabilities/Equity Demand Deposits Shareholders' equity 9000 Total $1,350,000 $ 150,000 1,500,000 150000 a. The amount of excess reserves is $ b. The maximum amount that loans and deposits could be increased by is $ c. Assume that the system becomes fully loaned up. Show the new balance sheet in the table above. d. Now that the system is fully loaned up, the money supply will have increased by $
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 17RQ: What is the asset-liability time mismatch that all banks face?
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