2. Redo the example of Gorgonzola in the text (see Tables 10.2 to 10.6), assuming that (1)...

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2. Redo the example of Gorgonzola in the text (see Tables 10.2 to 10.6), assuming that (1) initially, the Gorgonzolan central bank puts 5,000,000 guilders into circulation, and (2) commercial banks desire to hold reserves of 20 percent of deposits. As in the text, assume that the public holds no currency. Show the consolidated balance sheets of Gorgonzolan commercial banks for each of the following instances. (LO2) a. After the initial deposits (compare to Table 10.2). b. After one round of loans (compare to Table 10.3). c. After the first redeposit of guilders (compare to Table 10.4). d. After two rounds of loans and redeposits (Table 10.5). e. What are the final values of bank reserves, loans, deposits, and the money supply (compare to Table 10.6)?

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Principles Of Macroeconomics

ISBN: 9781264250356

8th Edition

Authors: Robert Frank, Ben Bernanke, Kate Antonovics, Ori Heffetz

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