ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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2. The Third National Bank has reserves of $20,000 and checkable deposits of $100,000. The reserve ratio is 20 percent. Households deposit $5000 in currency into the bank and that currency is added to reserves. 

2.1 How much excess reserves does the bank now have? Show your computation. 

 

2.2 Complete the table below for the Third National Bank. Classify the assets and liabilities and net worth. What is the total assets of Third National Bank?   

 

The figures in the table below are for the Third National Bank. All figures are in thousands of dollars. 

  

  

Assets 

Liabilities and Net Worth 

Stock Shares 

$    420    

$  

_____ 

_____  

Reserves 

25 

_____  

_____  

Property 

300 

____  

_____  

Securities 

100 

____  

_____  

Loans 

100 

____  

_____  

Demand Deposits 

105 

____  

_____  

 

2.3. If the required reserve ratio for the Third National Bank is 10 percent, what is the monetary multiplier?  

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