a) Using the information provided, construct a balance sheet for The Sample Bank USABank. That is, properly
Question:
a) Using the information provided, construct a balance sheet for The Sample Bank USABank. That is, properly list the assets, liabilities, and bank capital of The Sample Bank USA Bank in a T-Account format.
b) What is the reserve ratio for The Sample Bank USA Bank? If the reserve requirement is 15%, what is the excess reserves ratio for this bank?
c) If the reserve requirement is 15% and this bank is willing to have a 0% excess reserves ratio, how much deposit outflow from checking accounts can they sustain?
d) If the reserve requirement is 30% and this bank is willing to have a 0% excess reserves ratio, how much deposit inflow from saving deposits would they need?
e) Assume the Central Bank were to sell $100 of short-term securities to this bank. If the reserve requirement is 15% and this bank is willing to have a 0% excess reserves ratio, what action, if any, could the bank take to achieve comply with the reserve requirement (provide one example).
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-1259692406
18th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello