ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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14.
. A bank has reserves of $40, loans of $110, deposits of $90, and owners’ equity of
$60. Which of the following represents the bank’s total assets?
- $180
- $110
- $130
- $150
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- Only typed Answerarrow_forward2. Suppose Bank A initially started with $14 million in capital. A total of $156 million in checkable deposits is received. The Bank purchases securities worth of $50 million and the bank then makes a $50million commercial loan and lends another $20 million in mortgage loans. If required reserves are 15%, what does the bank balance sheet look like? (be sure to indicate required and excess reserves separately)arrow_forwardIn 2014, the net worth of a bank was $750$750 billion, and the value of customers' deposits was $300$300 billion. In 2019, the net worth of the bank increased by $175$175 billion, and the value of savings accounts increased by $270$270 billion.Calculate the difference in the bank's total assets between 2014 and 2019.arrow_forward
- Question 1. A bank has $140,000 in reserves, $1,600,000 in loans, and checkable deposits of $1,250,000. If the required reserve ratio is 10%, how are reserves split between required reserves and excess reserves?arrow_forward2. Here is the balance sheet of the consolidated banking system of the country of Zargadee (all entries are in millions): Consolidated Balance Sheet of the Entire Economy of Zargadee Assets Reserves Cash in Vault Deposits at CBZ Bonds Loans 50 90 Total Reserves Total Assets 140 460 1000 1600 Liabilities Deposits Borrowing from CBZ Total Liabilities 1400 200 1600 Assume that 1) households hold no currency and 2) banks hold no excess reserves. The current reserve requirement is 10%. The Central Bank of Zargadee (CBZ) uses the three traditional tools to perform monetary policy in an economy that is reserve constrained. a. Under our assumptions, what is the money multiplier? For each part (b)-(d) below, i) Conceptually explain the effect of the policy on the money supply. ii) Calculate the change in M1 given our assumptions. iii) Construct the new balance sheet of the consolidated banking system of Zargadee under the new policy. iv) When the money supply changes, list a chain of events to…arrow_forward51)Consider the following for National City Bank. If the required reserve ratio is 4 percent, the excess reserves of National City Bank is Assets Liabilities Reserves $10,000 Deposits $100,000 Loans $90,000 Select one: a. $10,000 b. $6,000 c. $3,000 d. $4,000arrow_forward
- 22. Which of the following entries would appear on the liabilities side of a commercial bank's balance sheet? Government of Canada securities demand deposits cash reserves mortgage loans foreign currency reservesarrow_forward37. Suppose that Second Republic Bank currently has $200,000 in demand deposits and $130,000 in outstanding loans. All remaining assets are in reserve. The Federal Reserve has set the reserve requirement at 10%. What is the value of this bank's reserve ratio (R)? (pick best answer) A) 15% B) 25% C) 35% D) 45% 2arrow_forward11. Please answer the table only. The columns specifically.arrow_forward
- 11arrow_forwardWhat are bank reserves? a.Deposits that are held in the form of gold reserves b.The fraction of deposits kept as currency that are not used for lending purposes c.The value of the owner’s equity in the bank d.The value of investments a bank keeps in excess of the value of deposits e.The sum of all loans a bank makes to borrowersarrow_forward10. Banks in the country of Mistania have a total of $17000 in required reserves and $276000 in checkable deposits. Calculate Mistania's required reserve ratio:arrow_forward
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