Question
Balance sheet of the Spring Bank Assets Liabilities Cash$ 7,000 Deposited with the Fed$ 3,000 Loans$ 140,000 Deposits$ 90,000 Capital$ 60,000 Total$ 150,000 Total$ 150,000
Balance sheet of the Spring Bank
Assets
Liabilities
Cash$ 7,000
Deposited with the Fed$ 3,000
Loans$ 140,000
Deposits$ 90,000
Capital$ 60,000
Total$ 150,000
Total$ 150,000
The required reserve ratio on all deposits is 10%
a. What, if any, are this bank's excess reserves?
b. How much new amount of loan will this bank be able to create because of the excess reserves?
c. How much new amount of loan will the entire banking system be able to create because of this excess reserves?
d. Answer part a, b and c if the required reserve ratio is changed to 8%.
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Econometric Analysis
Authors: William H. Greene
5th Edition
130661899, 978-0130661890
