Below is a short version of the balance sheet at Wells Fargo. Assume this bank has a 15% reserve requirement.Wells FargoAssetsLiabilitiesTotal Reserves$250,000Deposits$100,0001. What is the maximum this bank can lend out? $2. Mr. Smithers decides to withdraw $25,000 from his checking account here after which the bank will now make $45,000 in loans and purchase $14,000 in securities from the Fed. After all these transactionstake place, answer the following questions. (Enter your response rounded to the nearest whole number).a. The bank now has Total Reserves in the amount of $☐b. The bank now has Required Reserves in the amount of $c. The bank now has Excess Reserves in the amount of $d. The bank is now limited to making additional loans up to the amount of $e. The value of the simple money multiplier is (round to just 1 decimal)f. Should this bank lend its entire remaining reserves, the banking system can see an increase in the money supply of$

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Answered: Below is a short version of the balance…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter25: Money, Banking, And The Federal Reserve System

Section: Chapter Questions

Problem 4P

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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 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)
Victorian Bank's assets consist of $5600.00 in reserves and $13600.00 in bonds. In terms of libabilities, they have $6900.00 in checkable deposits with their customers. This gives them a net worth of $12300.00. The Federal Reserve conducts Open Market Operations by selling $2000.00 worth of bonds to Victorian Bank. Do Victorian Bank's reserves increase or decrease? Increase Decrease No change Calculate the change in Victorian Bank's net worth as a result of this policy:
Use the following balance sheet for the following bank in answering questions 18 and 19. Assume the required reserve ratio is 20%. Assets $ 27,000 Liabilities and net worth Checkable deposits Capital stock S110,000 200,000 Reserves Loans 50,000 33,000 200,000 Securities Property 18. Refer to the above data. This bank can safely expand its loans by a maximum of: * $5,000. $25,000. $12,000. $7,000
Below is the balance sheet for a bank. Under "Other" it has listed "$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 $X Using the balance sheet above, find the level of required reserves for this bank if the required reserve ratio = 8%(Give answers to 2 decimal places as needed)
By using the table, Commercial Bank Balance Sheet Assets ($) Liabilities (S) Vault Cash 8000 Deposits 35000 Loans 27000 1. If the required reserve ratio is 15 percent, the required reserve is $ 2. If the required reserve ratio is 15 percent, the maximum loan that the bank can newly make is $ 3. Update the balance sheet after the bank makes a new loan up to the amount determined in #2. 4. With the updated balance sheet (#3), calculate total assets ($) and total liabilities ($).
Assets Liabilities and Equity Reserves $5,000 Demand deposits $20,000 Business loans $10,000 Student loans $8,000 Government securities $2,000 Equity (Net worth) $5,000 Total assets $25,000 Total liabilities and equity $25,000 The following is a balance sheet for Smith Bank. Assume a 10% reserve requirement. A. Calculate a 10% reserve requirement B. Calculate the maximum amount of additional loans that Smith Bank can make without selling its holdings of government securities. C. Assuming that Smith Bank and other banks now lend out all excess reserves, calculate the maximum possible change in the following: i. Demand deposits throughout the banking system ii. Total reserves throughout the banking system D. Suppose that the country's central bank purchases $1,000 of Smith Bank's holdings of government securities as part of its open market operations. Do…
A bank has a reserve ratio of 10 percent, and it has received $5,000 of deposits. What is the bank's assets? Group of answer choices It has $500 in reserves and $4,500 in loans. It has $50 in reserves and $4,950 in loans. It has $50 in reserves and $5,000 in loans. It has $10 in reserves and $4,990 in loans.
Table 1 shows the financial position of the Smithville Bank once $4441.00 has been deposited. Assume that the required reserve ratio is 7.00%. Table 1. Original Assets and Liabilities The bank manager decides to lend Billy Bob Smith all of Assets Liabilities the bank's excess reserves. Billy Bob takes the funds to Eula Mae's Used Machines and buys a pickup truck. Eula reserves: $4441.00 deposits: $4441.00 Mae then deposits the money in her account back at the Smithville Bank. Table 2. Assets and Liabilities After Bank Makes a Loan Table 2 should show the bank's accounts after the loan is made and the funds again deposited. Round all answers to Assets Liabilities the nearest cent. reserves: ? deposits: ? loans: ? What are the bank's loans in Table 2? What are the bank's reserves in Table 2? What are the bank's deposits in Table 2? %24 %24 %24
Question 26 A commercial bank has excess reserves of $10,000 and a required reserve ratio of 20%. It grants a loan of $8,000 to a customer, who then writes out a check for $8,000 that is deposited in another bank. The first bak will find its reserves decrease by: $3,000 $2,000 $1,600 $8,000 Next Page Page 26 of 35
10 Raquel goes down to Goldenrod Bank and deposits $2350 into their checking account. What has happened to Goldenrod Bank’s balance sheet? Mortgages have increased by $2350 The money multiplier has increased Goldenrod Bank's reserve ratio has increased Goldenrod Bank's liabilities have increased by $2350
Your uncle repays a $100 loan from Tenth NationalBank (TNB) by writing a $100 check from his TNBchecking account. Use T-accounts to show the effectof this transaction on your uncle and on TNB. Hasyour uncle’s wealth changed? Explain.
What is the risk if a bank does not diversify its loans?

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