Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assets Liabilities & NW Reserves $50.00 Deposits $250.00 Securities $30.00 Borrowings $10.00 Loans $220.00 Bank Capital $40.00 Total $300.00 Total $300.00 The above balance sheet

image text in transcribed
Assets Liabilities & NW Reserves $50.00 Deposits $250.00 Securities $30.00 Borrowings $10.00 Loans $220.00 Bank Capital $40.00 Total $300.00 Total $300.00 The above balance sheet pertains to a bank. Deposits consist only of demand deposits (checkable deposits). The required reserve ratio is RRR = 10%. Someone withdraws $40 from her deposit account. Which of the following balance sheets represents the ultimate balance sheet after this transaction (after the withdrawal takes place and after the bank takes the necessary steps to comply with the Fed's reserve requirements). Balance Sheet A Assets Liabilities & NW Reserves $10.00 Deposits $210.00 Securities $30.00 Borrowings $10.00 Loans $220.00 Bank Capital $40.00 Total $260.00 Total $260.00 Balance Sheet B Assets Liabilities & NW Reserves $21.00 Deposits $210.00 Securities $30.00 Borrowings $21.00 Loans $220.00 Bank Capital $40.00 Total $271.00 Total $271.00 Balance Sheet C Assets Liabilities & NW Reserves $0.00 Deposits $210.00 Securities $40.00 Borrowings $10.00 Loans $220.00 Bank Capital $40.00 Total $260.00 Total $260.00 Balance Sheet D Assets Liabilities & NW Reserves $10.00 Deposits $210.00 Securities $10.00 Borrowings $10.00 Loans $240.00 Bank Capital $40.00 Total $260.00 Total $260.00 O Balance Sheet A O Balance Sheet B O Balance Sheet C O Balance Sheet D

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

What Environmentalists Need To Know About Economics

Authors: Jason Scorse

1st Edition

0230107311, 9780230107311

More Books

Students also viewed these Economics questions