he table below is the combined balance sheet for all the banks in a banking system. Each bank has a target reserve ratio of 5%. Assets Reserves Loans Securities Fixed assets Total $300 1,900 1,400 400 $4,000 $ (1) IMMERMA HEMMEN $ (2) Liabilities/ Equity Demand deposits Shareholders' equity Total a. Fill in the blanks in columns (1) reflecting the complete effect of all excess reserves being loaned out. T b. The maximum possible increase in the money supply is $ < Prev Search 10 of 14 $3,600 400 $4,000 SAMSUNG c. Returning to the original balance sheet, if the target reserve ratio changes to 10%, the quantity of loans the system be forced to call in will be $ Write in the figures in columns (2) that show this process completed. Next > $ (1) $ (2)

he table below is the combined balance sheet for all the banks in a banking system. Each bank has a target reserve ratio of 5%. Assets Reserves Loans Securities Fixed assets Total $300 1,900 1,400 400 $4,000 $ (1) IMMERMA HEMMEN $ (2) Liabilities/ Equity Demand deposits Shareholders' equity Total a. Fill in the blanks in columns (1) reflecting the complete effect of all excess reserves being loaned out. T b. The maximum possible increase in the money supply is $ < Prev Search 10 of 14 $3,600 400 $4,000 SAMSUNG c. Returning to the original balance sheet, if the target reserve ratio changes to 10%, the quantity of loans the system be forced to call in will be $ Write in the figures in columns (2) that show this process completed. Next > $ (1) $ (2)

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance

Section: Chapter Questions

Problem 4.8P

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