Consider the Federal Reserve balance sheet below (in billions of dollars): Assets   Liabilities   Government Securities 600 Reserves 600 Private Securities 100 Currency 400 Loans to Banks       If the Federal Reserve sells $50 billion of one year Treasury bills, what will the new monetary base be? $ ___ billion

Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system and that all figures are in billions of dollars. The reserve ratio is 25 percent. Assets Reserves Securities Loans $ 1 52 48 100 (a) $ (b) Instructions: Enter your answers as a whole number. billion Liabilities and net worth Checkable deposits a. What is the amount of excess reserves in this commercial banking system? $ billion What is the maximum amount the banking system might lend? $ billion $ 1' 200 (a) Show in columns 1(a) and 1'(a) how the consolidated balance sheet would look after this amount has been lent. Enter these new values in the gray shaded cells of the given table. What is the size of the monetary multiplier? (b) b. Using the original figures, answer the questions in part a assuming the reserve ratio is 20 percent. What is the amount of excess reserves in this commercial banking system?

Table 29-1 Effects of an open-market transaction on the balance sheets of Banks and the Fed (in millions of dollars) Banks Federal Reserve System Assets Liabilities Assets Liabilities Bank Reserves: Reserves: +$20 U.S. Gov't Sec. +$20 +$20 U.S. Gov't Securities:-$20 In Table 29-1, if the required reserve ratio is 5 percent, what will happen to the money supply? Use the oversimplified money multiplier in your calculations. The money supply will not change. The money supply will decrease by $400 million. The money supply will decrease by $100 million. The money supply will increase by $400 million. The money supply will increase by $20 million.

The table given below shows the assets and liabilities of the Tenth National Bank, Assume that this is the only bank in the economy. Table 16 Balance Sheet of Tenth National Bank Assets Liabilities Reserves $2,730 Deposits $7,640 Loans $3,300 Total Assets $7,640 Total Liabilities $7,640 Refer to Table 16. If this Bank's depositors withdraw $935, and the Federal Reserves decreases the reserve requirement from 12% to 9%. This bank's excess reserves will change by: O $313.35 O $371.05 O -$554.60 O -$621.65 -$563.95

Suppose that a $100 purchase of government bonds by the U.S. Federal Reserve causes a $200 increase in the money supply in an economy in which banks hold 25 percent of deposits as reserves. What percentage of bank deposits is held as currency?

_______ is the most liquid measure of money supply

Show the changes to the balance sheets for commercial banks when the Federal Reserve buys $50 million in US Treasury Bills. If the public holds a fixed amount of currency ( so that all loans create an equal amount of deposits in the banking system), the minimum reserve requirement is 5%, by how much will checkable bank deposits in commercial banks change?

Based on the T Chart, if The FED Bought $1,000 in Bonds from this bank what numbers would change? Assets Liabilities and Equity $20,000 Required Reserves(Vault) $2,000 Demand Deposits Excess Reserves (Loanable Funds) $3,000 Business Loans $5,000 Student Loans $10,000 Government Securities Total Assets $5,000 Owner's Equity Total Liability $5,000 $25,000 $25,000

The reserve requirement is 25%, and the banking system receives a new $1,000 deposit. The bank does not want to hold excess reserves and the public does not want to hold any currency. By how much will the Money Supply ultimately rise? $6000 $3000 $5000 $4000

If the central bank sells $500 in bonds to a bank that has issued $10000 in loans and is exactly meeting the reserve requirement of 10%, what will happen to the amount of loans and to the money supply in general?