Solve d, e , f

Problem Set 4.6 Bank Balance Sheets 1. Use the table below to answer the following questions. The following is a simplified balance sheet for Guru Bank in the United States. Assets Liabilities Required Reserves: $10,000 Demand Deposits: $100,000 Excess Reserves: $5,000 Owner's Equity: $10,000 Customer Loans: $85,000 Treasury Bonds: $10,000 a. What is the reserve requirement? b. What is the maximum amount of money this bank can lend out at the current moment? c. Suppose that the Federal Reserve purchases all of the Treasury Bonds from Guru Bank. What will be the change in dollar value to the following based on the purchase of bonds. (i) Excess Reserves (ii) Required Reserves (ii) Demand Deposits Suppose instead of the Government purchase of bonds, an individual withdrawals $5,000 from their checking account at Guru Bank. d. By how much will Guru Bank's total reserves change based on the individual's withdrawal? e. What is the initial impact on the M1 measure of money supply? Explain. f. As a result of the withdrawal, what is the new value of excess reserves on the balance sheet of Guru Bank based on the reserve requirement from part (a)