6. Metropolis National Bank is currently holding 2% of its deposits as excess reserves. Remember to briefly discuss your results. Metropolis National Bank Assets Liabilities Deposits Reserves Loans $60,000 $440,000 $500,000 a. Refer to Table. Metropolis National Bank is currently holding 2% of deposits as excess reserves. What is the reserve requirement? b. Refer to Table. Metropolis National Bank is currently holding 2% of deposits as excess reserves, Assuming that all banks have the same required reserve ratio, and then none want to hold excess reserves what is the value of the money multiplier? c. Refer to Table Metropolis National Bank is currently holding 2% of deposits as excess reserves. Assume that no banks in the economy want to hold excess reserves and that people only hold deposits and no currency. How much does the money supply ultimately increase when Metropolis National Bank lends out its excess reserves? d. Refer to Table. Metropolis National Bank is holding 2% of its deposits as excess reserves. Assume that no banks in the economy want to maintain holdings of excess reserves and that people only hold deposits and no currency. The Fed makes open market purchases of $10,000. The person who sold bonds to the Fed deposits all the funds in Metropolis National Bank. If the bank now loans out all its excess reserves, by how much will the money supply increase? Briefly discuss results. SSSSSSSS============= = = = = II Il ===== 6. Metropolis National Bank is currently holding 2% of its deposits as excess reserves. Remember to briefly discuss your results. Metropolis National Bank Assets Liabilities Deposits Reserves Loans $60,000 $440,000 $500,000 a. Refer to Table. Metropolis National Bank is currently holding 2% of deposits as excess reserves. What is the reserve requirement? b. Refer to Table. Metropolis National Bank is currently holding 2% of deposits as excess reserves, Assuming that all banks have the same required reserve ratio, and then none want to hold excess reserves what is the value of the money multiplier? c. Refer to Table Metropolis National Bank is currently holding 2% of deposits as excess reserves. Assume that no banks in the economy want to hold excess reserves and that people only hold deposits and no currency. How much does the money supply ultimately increase when Metropolis National Bank lends out its excess reserves? d. Refer to Table. Metropolis National Bank is holding 2% of its deposits as excess reserves. Assume that no banks in the economy want to maintain holdings of excess reserves and that people only hold deposits and no currency. The Fed makes open market purchases of $10,000. The person who sold bonds to the Fed deposits all the funds in Metropolis National Bank. If the bank now loans out all its excess reserves, by how much will the money supply increase? Briefly discuss results. SSSSSSSS============= = = = = II Il =====
