Suppose that, as a result of a public health crisis, commercial banks decide to increase the amount
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Question:
Suppose that, as a result of a public health crisis, commercial banks decide to increase the amount of cash in their vaults by $200m, in case this is needed to meet a sudden outflow of deposits.
(a) Show the effects this would have on the balance sheets of commercial banks and the central bank
(b) If depositors then withdraw $100m of this, show the combined effect on the balance sheets of commercial banks.
Related Book For
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts
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