5. Working through a change in the reserve requirement Assume that the following table portrays the balance sheet of First Western bank. Assets Liabilities a rid N el: We rth Vault Cash $150,000 Deposits $900,000 Deposits at Fed $250,000 Loans $500,000 Total $900,000 Total $900,000 First Western's bank reserves are equal to . If First Western bank wanted to maintain 0.20 of its assets as reserves against checking deposits, First Westem' would maintain as reserves. Therefore, it would have as additional reserves over and above the desired amount. If First Western uses the reserves above the desired level to extend additional loans, the money supply would increase by If First Western wanted to maintain 0.10 of its assets as reserves against checking deposits, First Western' would maintain as reserves, additional reserves would he , and the increase in the money supply would be . The increase in the money supply will be V if First Western chooses a desired reserve ratio of 0.10. 5. Working through a change in the reserve requirement Assume that the following table portrays the balance sheet of First Western bank. Assets Liabilities and Net Worth Vault ICash $150,000 Deposits $900,000 Deposits at Fed $250,000 Loans $500,000 Total $900,000 Total $900,000 First Western's bank reserves are equal to . If First Western bank wanted to maintain 0.20 of its assets as reserves against checking deposits, First Westem' would maintain as reserves. Therefore, it would have as additional reserves over and above the desired amount. 11\" First Western uses the reserves above the desired level to extend additional loans, the money supply would increase bv If First Western wanted to maintain 0.10 I smaller . as reserves against checking deposits, First Western' would maintain as reserves, additional reserves would be , and the increase in the money supplv would be The increase in the money supply will be V if First Western chooses a desired reserve ratio of 0.10