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Balance Sheet of the National Bank of PBCC Assets Liabilities and Net Worth Actual Reserve's $ 30,000 Demand Deposits $120,000 Securities Loans 40,000 80,000
Balance Sheet of the National Bank of PBCC Assets Liabilities and Net Worth Actual Reserve's $ 30,000 Demand Deposits $120,000 Securities Loans 40,000 80,000 Net Worth 30,000 $150,000 $150,000 A. If the reserve ratio is 20%, how much does the bank have to maintain in required reserves? B. By how much will this bank increase the supply of money if it loans out all it's excess reserves? C. If we assume this money is deposited into the banking system how much will the supply of money increase? D. If the "Fed" reduces the Reserve Ratio to 10% how does that alter the excess reserve of the bank? Increased/decreased by (circle one) In the banking system?
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