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3 Bank Balance Sheets Liabilities Req. Reserves $2,000 Demand Deposits $20,000 Excess Reserves $3,000 Owner's Equity $5,000 Treasury Bonds $5,000 Loans $15,000 If Bob withdrawals

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3 Bank Balance Sheets Liabilities Req. Reserves $2,000 Demand Deposits $20,000 Excess Reserves $3,000 Owner's Equity $5,000 Treasury Bonds $5,000 Loans $15,000 If Bob withdrawals $3000 into this bank: 1.Will M1 money supply initially T, i, stay same? 2.How much is the required reserves? 3.How much is the excess reserves? 4.Assume Bob burned the money, what is the maximum change in money supply? Copyright

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