Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 10%. Nick, a client of First Main Street Bank, deposits $500,000 into his checking account at First Main Street Bank. Complete the following table to reflect any changes in First Main Street 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 10%. 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) 500,000

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. Recall, to calculate checkable deposits you have to add the original checkable deposits to the new deposit. To calculate required reserves for the deposits, you have to multiply the required reserve ratio (decimal from) by checkable deposits. To calculate excess reserves, you will subtract required reserves from actual reserves. Complete the table attached for the Third National Bank. You have to distinguish between a bank's assets and bank's liabilities.  The figures in the table attached are for the Third National Bank. All figures are in thousands of dollars. 1. What is the total assets of this bank?  Explain the basics of this bank’s balance sheet. 2. If the monetary multiplier is 4, what is the required reserve ratio? Describe how and identify by what amount the Third National…

Use the information given in North Central National Bank's balance sheet to answer the following questions. Assets Reserves Loans Securities Bank's Balance Sheet $200 $800 Liabilities and Owners' Equity $1,600 Deposits Debt $1,000 Capital (owners' equity) $250 $150 Suppose the owners of the bank borrow $100 to supplement their existing reserves. This would increase the reserves account and account. This would also bring the leverage ratio from its initial value of to a new value of Which of the following statements regarding the capital requirement is true? Check all that apply. Its intended goal is to protect the interests of those who hold equity in the bank. It specifies a minimum leverage ratio for all banks. The higher the percentage of assets a bank holds as loans, the higher the capital requirement. the

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…

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7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 10%. Hubert, a client of First Main Street Bank, deposits $500,000 into his checking account at First Main Street Bank. Complete the following table to reflect any changes in First Main Street 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 10%. 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) 500,000         Now, suppose First Main Street Bank loans out all of its new excess reserves to Eileen, who immediately uses the funds to write a check to Clancy. Clancy…

Suppose a nation's banking system has the following account Saving Account $1,200 Checking Account 810 Traveler's Check 35 240 1,090 Cash Credit Card Money Market Mutual Funds What's the value of M1 in this banking system? Your Answer: 910

Assuming that the reserve ratio is 10%, what amount of excess reserves are held by with the bank balance sheet listed below? Assets     Liabilities & Net Worth   Reserves    $280,000   Checking deposits $2,800,000 Loans Outstanding $2,920,000       Total $3,200,000   Net Worth         Stockholders' Equity    $400,000       Total $3,200,000   a. $240,000   b. zero   c. $320,000   d. $280,000

8:30 1 19) Which of the following is a function that money serves? A) medium of exchange B) unit of value C) store of account D) All of the above are correct.

Which of the following components is not included in the M2 definition of money?     A)  small-denomination time deposits.   B)  bonds.   C)  savings deposits.   D)  M1