It is the holiday season, and you withdraw $2,000 from your account at First National Bank to purchase gifts. Complete the following table to show how the bank's balance sheet changes, assuming a required reserve ratio of 20%. First National Bank Assets (Dollars) Reserves Addendum: Changes in Reserves Actual reserves: Liabilities (Dollars) Checking Deposits Required reserves Excess reserves
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- Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 42Deposits 245Loans 160 Securities 48Other $X Using the balance sheet above, find the level of required reserves for this bank if the required reserve ratio = 8%(Give answers to 2 decimal places as needed)Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 44Deposits 255Loans 155 Securities 51Other $X Using the balance sheet above, find the level of excess reserves this bank is holding if the required reserve ratio = 6%(Give answers to 2 decimal places as needed)Consider the following balance sheet of Berjaya Bank. The required reserve ratio on demand deposits is 8%. Berjaya Bank Aset / Assets (million $) Rizab / Reserves Pinjaman / Loans Sekuriti / Securities Liabiliti / Liabilities (million $) Deposit semasa Demand deposits Modal bank / Net Worth 30 290 150 140 30 1. Calculate the bank's excess reserves 2. Suppose Berjaya Bank sells $40 million of its securities to the central bank. Show the balance sheet of Berjaya Bank after this transaction
- Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 20%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves Change in Required Reserves (Dollars) (Dollars) (Dollars) 750,000 Now, suppose First Main Street Bank loans out all of its new excess reserves to Kate, who immediately uses the funds to write a check to Hubert. Hubert deposits the funds immediately into his checking account at Second Republic Bank. Then Second Republic Bank lends out all of its new excess reserves to Shen, who writes a check to Poornima, who deposits the money into her account at Third Fidelity Bank. Third Fidelity lends out all of its new excess reserves to Valerie in turn. Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dollar. Increase in Deposits Increase in Required Reserves…Initial deposit is $10,000 Required Reserve Ratio is 20% Calculate: $ Multiplier Required Reserves Excess ReservesThe reserve requirement is 10%, and Leroy deposits his $1,000 check received as agraduation gift in his checking account. The bank does NOT want to hold excessreserves.a) Show the bank’s balance sheet immediately after the deposit.b) How much of the deposit is the bank required to keep in reserves?c) How much can the bank loan based on the $1,000 deposit?
- 7. The money creation process Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 20%. Darnell, a Southeast Mutual Bank customer, deposits $1,500,000 into his checking account at the local branch. Complete the following table to reflect any changes in Southeast Mutual Bank's T-account (before the bank makes any new loans). Assets Liabilities Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 20%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves (Dollars) (Dollars) 1,500,000 Change in Required Reserves (Dollar) Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Beth, who immediately uses the funds to write a check to Andrew. Andrew deposits the funds immediately into his checking account at Walls Fergo Bank. Then…Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 10%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited (Dollars) 500,000 Change in Excess Reserves (Dollars) Change in Required Reserves (Dollars) Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Neha, who immediately uses the funds to write a check to Lorenzo. Lorenzo deposits the funds immediately into his checking account at Walls Fergo Bank. Then Walls Fergo Bank lends out all of its new excess reserves to Andrew, who writes a check to Teresa, who deposits the money into her account at PJMorton Bank. PJMorton lends out all of its new excess reserves to Beth in turn. Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dollar. Southeast Mutual Bank Walls Fergo Bank PJMorton Bank Increase in Deposits…Total reserves that a bank has at the Fed are $14 million. Currently the bank has excess reserves of $5 million and has made loans of $100 million. The Fed's reserve requirement for the bank is 6%. What is the maximum deposit level (in $ millions) the bank can expand to by utilizing its excess reserves? [Input your answer rounded to 1 decimal places. Just input the numerical value. You do not need to put the $ symbol or "millions" in your answer.]
- Third National Bank has reserves of $20,000 and checkable deposits of $200,000. The reserve ratio is 10 percent. Households deposit $5,000 in currency into the bank, and the bank adds that currency to its reserves. What amount of excess reserves does the bank now have? Instructions: Enter your answer as a whole number. %24BALANCE SHEET OF BANK A (S IN MILLIONS) ASSETS LIABILITIES and NET WORTH Reserves (Cash/Reserves at Fed) 550 Demand Deposits $100 Losns 20 Govt. Securities 90 Net Worth (Owners' Equity) What is the net worth of this bank? 2. If the required reserve is 10%, what is the amount of REQUIRED RESERVES that this bank must bold? 3. What then is the mount of EXCESS RESERVES that this bank is now holding? How much does this bank have available for NEW LOANS? 5. If the required reserve is increased to 20%, whal is the amount of REQUIRED RESERVES that this bank must bold?Total Reserves are $5 Trillion. Required Reserves are $2 Trillion. Calculate theExcess Reserves. Is it 2, 3, 5, or 7 Trillion?