1). If the required reserve ratio is 10%, how much money can this bank create?

2). The required reserve ratio is 10%. if the bank makes a loan of the maximum amount possible, how much will be in excess reserves immediately after the loan is made--before it is spent.

3). The required reserve ratio is 10%. if this bank makes a loan of the maximum amount possible, what is the maximum amount of additional lending possible in the banking system?

4). The required reserve ratio is 10%. If the federal reserve sells securities to this bank, what is the maximum amount of securities it could sell?

5). The reserve requirement is 10%. Suppose Klaus finds $1000 cash stashed in his exoskeleton and deposits at the bank who is T account is shown below. By how much will the M1 money supply change immediately after Klaus' deposit?

6). The reserve requirement is 10%. Suppose that Klaus receives $1000 from the sale of a bond to the federal reserve. Klaus deposits it at the bank whose T account is shown below. By how much will the M1 money supply change immediately after Klaus's deposit?

7). The reserve requirement is 10%. Suppose Silas anticipates that his pick up will need an expensive repair and withdraws $1000 from his checking account from the bank whose T account appears below. By how much do the banks reserves change after the withdrawal?

8). The reserve requirement is 10%. The stockholders equity remains unchanged, but liabilities and net worth increase by $20,000. What must happen to assets?

9). The reserve requirement is 10%. Suppose that the bank whose T account is shown below is uncharacteristically cautious and holds back an extra 5% of its reserves. Suppose it lends the amount that fits its acceptable level of risk, by how much can real GDP change after all rounds of spending?

Transcribed Image Text:

If the required reserve ratio is 10 percent, how much money can this bank create? Reserves Loans Securities Property Total Assets Assets Liabilities + Net Worth $10,000 Checkable Deposits $46,000 Stockholders' Equity $16,000 $4,000 $76,000 Total Liabilities and Net Worth $70,000 $6,000 $76,000 If the required reserve ratio is 10 percent, how much money can this bank create? Reserves Loans Securities Property Total Assets Assets Liabilities + Net Worth $10,000 Checkable Deposits $46,000 Stockholders' Equity $16,000 $4,000 $76,000 Total Liabilities and Net Worth $70,000 $6,000 $76,000

Answer rating: 100% (QA)

1 The required reserve ratio is the percentage of total deposits that a bank is required to hold in its reserve account in order to cover its liabilities and maintain a healthy balance sheet In this c... View the full answer