Use the information presented in Southwestern Mutual Bank's balance sheet to answer the following questions. Suppose the owners of the bank borrow $100 to supplement their existing reserves. This would increase the reserves account and    the    account. his would also bring the leverage ratio from its initial value of    to a new value of    .   Which of the following do bankers take into account when determining how to allocate their assets? Check all that apply. The riskiness of each asset   The total value of liabilities   The size of the monetary base

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
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Chapter1: Making Economics Decisions
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Use the information presented in Southwestern Mutual Bank's balance sheet to answer the following questions.

Suppose the owners of the bank borrow $100 to supplement their existing reserves. This would increase the reserves account and    the    account.

his would also bring the leverage ratio from its initial value of    to a new value of    .
 
Which of the following do bankers take into account when determining how to allocate their assets? Check all that apply.
The riskiness of each asset
 
The total value of liabilities
 
The size of the monetary base
 
 
Assets
Reserves
Loans
Bank's Balance Sheet
$175
$700
Liabilities and Owners' Equity
Deposits
Debt
Securities $875 Capital (owners' equity)
$1,400
$225
$125
Transcribed Image Text:Assets Reserves Loans Bank's Balance Sheet $175 $700 Liabilities and Owners' Equity Deposits Debt Securities $875 Capital (owners' equity) $1,400 $225 $125
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