1.Calculate the amount of required reserves.

Answer: The amount of required reserves = $___________

2. Calculate the amount of excess reserves.

Answer: The amount of excess reserves = $___________

3. Assume that Bank A loans out the entire amount of excess reserve, what is the maximum amount of new money created for the economy through the multiplier effects? Assume that rr =10% for all banks.

Answer: The total amount of new money created for the economy = $___________

4.Suppose the customers of Bank A withdraw some money. Will the amount of money Bank A be able to lend out increase or decrease?

Consider the following balance sheet of Bank A. Assume the required reserve ratio is 10%. Use the given information to answer questions 20 - 23. Assets Loans $5,000 $7001 Liabilities and owner's equity Deposits $6,0001 Borrowings $5001 Reserves US Treasury securities Other Assets Owner's equity $1,200 $1,500 $500 Total liabilities and owner's equity Total Assets $7,700 $7,700