Assets Answer: Liabilities Required Reserves: $460000 Loans $150000 Bonds: $1940000 The above is the T-Accounts for TD bank. If the reserve ratio is 10 percent, what is the change in loans after the excess reserves are loaned out? Deposits: $2550000 Capital: 0

Assets Answer: Liabilities Required Reserves: $460000 Loans $150000 Bonds: $1940000 The above is the T-Accounts for TD bank. If the reserve ratio is 10 percent, what is the change in loans after the excess reserves are loaned out? Deposits: $2550000 Capital: 0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Assets
Answer:
Liabilities
Required Reserves: $460000
Loans $150000
Bonds: $1940000
The above is the T-Accounts for TD bank. If the reserve ratio is 10 percent, what is the change in loans
after the excess reserves are loaned out?
Deposits: $2550000
Capital: 0

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Step 1: Introduction:

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Step 2: Identification of Reserve Ratio (RR):

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Step 3: Calculate Initial Excess Reserves:

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Step 4: Determine the Money Multiplier (MM):

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Step 5: Assess Change in Loans:

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