Consider the balance sheet below for Gold Rush Bank, NA. (a/k/a GRB) Liabilities Assets Reserves $240,000.00...
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Consider the balance sheet below for Gold Rush Bank, NA. (a/k/a GRB) Liabilities Assets Reserves $240,000.00 Loans $70,000.00 Securities $40,000.00 Demand Deposits-$350,000.00 Loans from FED-$50,000.00 Cash-$50,000.00 If the required reserve ratio or 0.10 and the portion of M1 kept as currency or 0.70, then answer the following: a. How much does GRB have in required reserves (RR)? How much money does GRB have in excess reserves (ER)? (Calculate both to the nearest penny) b. Calculate the potential money multiplier (mp) as a fully reduced fraction. How much potential new money (Mp) can be created by GRB if they loan out all of their excess reserves? (Calculate this to the nearest penny) c. Calculate the ACTUAL Money Multiplier (ma) as a fully reduced fraction. Calculate ACTUAL (M₂) Money Created to the nearest penny. Consider the balance sheet below for Gold Rush Bank, NA. (a/k/a GRB) Liabilities Assets Reserves $240,000.00 Loans $70,000.00 Securities $40,000.00 Demand Deposits-$350,000.00 Loans from FED-$50,000.00 Cash-$50,000.00 If the required reserve ratio or 0.10 and the portion of M1 kept as currency or 0.70, then answer the following: a. How much does GRB have in required reserves (RR)? How much money does GRB have in excess reserves (ER)? (Calculate both to the nearest penny) b. Calculate the potential money multiplier (mp) as a fully reduced fraction. How much potential new money (Mp) can be created by GRB if they loan out all of their excess reserves? (Calculate this to the nearest penny) c. Calculate the ACTUAL Money Multiplier (ma) as a fully reduced fraction. Calculate ACTUAL (M₂) Money Created to the nearest penny.
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Related Book For
Money Banking and Financial Markets
ISBN: 978-1259746741
5th edition
Authors: Stephen Cecchetti, Kermit Schoenholtz
Posted Date:
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