$5$ Problem $4-5($LG $4-3)20$ points National Bank currently has $$900$ million in transaction deposits on its balance sheet. The current reserve requirement is $12$ percent, but the Federal Reserve is decreasing this requirement to $10$ percent.

A$.$ Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to loans, but borrowers return only $50$ percent of these funds to National Bank as transaction deposits.

B$.$ Show the balance sheet of the Federal Reserve and National Bank if National Bank converts $90$ percent of its excess reserves to loans and borrowers return $80$ percent of these funds to National Bank as transaction deposits. $5$

Problem $4-5($LG $4-3)$

$20$

points

National Bank currently has $\backslash (\backslash$$ $900\backslash )$ million in transaction deposits on its balance sheet. The current reserve requirement is $12$ percent, but the Federal Reserve is decreasing this requirement to $10$ percent.

a$.$ Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to loans, but borrowers return only $50$ percent of these funds to National Bank as transaction deposits.

b$.$ Show the balance sheet of the Federal Reserve and National Bank if National Bank converts $90$ percent of its excess reserves to loans and borrowers return $80$ percent of these funds to National Bank as transaction deposits.

Answer is not complete.

Complete this question by entering your answers in the tabs below.

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|\}$

$\backslash$hline Required $\backslash \backslash$

$\backslash ($ A $\backslash )$ & Required $\backslash \backslash$

B

$\backslash$end$\{$tabular$\}$

Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to loans, but borrowers return only $50$ percent of these funds to National Bank as transaction deposits.

Note: Enter your answers in millions. Do not round intermediate calculations. Round your "Panel B$"$ answers to $3$ decimal places. $($e$.$g$.,32\mathrm{.}161)$

Show less $\backslash (\backslash$mathbf$\{$A$\}\backslash )$

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|$c$|$c$|$c$|$c$|\}$

$\backslash$hline $\backslash$multicolumn$\{7\}\{|$l$|\}\{$Panel A: Initial Balance Sheets$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{7\}\{|$c$|\}\{$Federal Reserve Bank$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Assets$\}$ & $\backslash$multicolumn$\{4\}\{|$c$|\}\{$Liabilities$\}\backslash \backslash$

$\backslash$hline Securities $(\backslash (\backslash$checkmark $\backslash ))\backslash$$ & $\backslash$$ $108\backslash (\{\}^\{\backslash$text $\{/\}\}\backslash )$ & million & Reserve accounts & $\backslash (\backslash$checkmark $\backslash ))$ & $\backslash$$ $108\backslash (\{\}^\{\backslash$text $\{/\}\}\backslash )$ & million $\backslash \backslash$

$\backslash$hline & & & & & & $\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{7\}\{|$c$|\}\{$National Bank$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Assets$\}$ & $\backslash$multicolumn$\{4\}\{|$c$|\}\{$Liabilities$\}\backslash \backslash$

$\backslash$hline Loans $($V$)$ & $\backslash$$ $792$ & million & Transaction deposits & $\backslash (\backslash$checkmark $\backslash )$ & $\backslash$$ $900\backslash (\{\}^\{\backslash$text $\{$c $\}\}\backslash )$ & million $\backslash \backslash$

$\backslash$hline Reserve deposits at Fed $\backslash ((\backslash$checkmark$)\backslash )$ & $108($ & million & & & & $\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{7\}\{|$l$|\}\{\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{7\}\{|$l$|\}\{$Panel B: Balance Sheet after All Changes$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{7\}\{|$c$|\}\{$Federal Reserve Bank$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Assets$\}$ & $\backslash$multicolumn$\{4\}\{|$c$|\}\{$Liabilities$\}\backslash \backslash$

$\backslash$hline Securities $\backslash (\{\}^\{\backslash$text $\{/\}\}\backslash )$ & $\backslash$$ $\backslash (79\mathrm{.}200^\{\backslash$times$\}\backslash )$ & million & Reserve accounts & $-$ & $\backslash$$ $\backslash (79\mathrm{.}200\backslash$times $\backslash )$ & million $\backslash \backslash$

$\backslash$hline & & & & & & $\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{7\}\{|$c$|\}\{$National Bank$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Assets$\}$ & $\backslash$multicolumn$\{4\}\{|$c$|\}\{$Liabilities$\}\backslash \backslash$

$\backslash$hline Loans & & million & Transaction deposits & $-$ & $\backslash [$

$\backslash$$ $792\mathrm{.}000^\{$x$\}$

$\backslash ]$ & million $\backslash \backslash$

$\backslash$hline Reserve deposits at Fed $\backslash ((\backslash$checkmark$)\backslash )$ & $\backslash (79\mathrm{.}200\backslash$times $\backslash )$ & million & & & & $\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

Previous $5$

Problem $4-5($LG $4-3)$

$20$

points

National Bank currently has $\backslash (\backslash$$ $900\backslash )$ million in transaction deposits on its balance sheet. The current reserve requirement is $12$ percent, but the Federal Reserve is decreasing this requirement to $10$ percent.

a$.$ Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to loans, but borrowers return only $50$ percent of these funds to National Bank as transaction deposits.

b$.$ Show the balance sheet of the Federal Reserve and National Bank if National Bank converts $90$ percent of its excess reserves to loans and borrowers return $80$ percent of these funds to National Bank as transaction deposits.

Answer is not complete.

Complete this question by entering your answers in the tabs below.

Required Required

A

B

Show the balance sheet of the Federal Reserve and National Bank if National Bank converts $90$ percent of its excess reserves to loans and borrowers return $80$ percent of these funds to National Bank as transaction deposits.

Note: Enter your answers in millions. Do not round intermediate calculations. Round your "Panel B$"$ answers to $3$ decimal places. $($e$.$g$.,32\mathrm{.}161)$

Show less $4$

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