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Case 1: The reserve ratio (R)=20%. 1a. What is the maximum amount of new loans that Big Bucks Bank can make? 1b. Show in columns

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Case 1: The reserve ratio (R)=20%. 1a. What is the maximum amount of new loans that Big Bucks Bank can make? 1b. Show in columns (1) and (1') how the bank's balance sheet will appear after the bank has lent this additional amount. 1c. By how much has the supply of money changed? \$ 1d. How will the bank's balance sheet appear after checks drawn for the entire amount of the new Ioans have been cleared against the bank? Show the new balance sheet in columns (2) and (2'). Case 2: The reserve ratio (R)=15%. 2a. Using the original figures, revisit questions a,b, and c based on the assumption that the reserve ratio (R) is 15%. What is the maximum amount of new loans that this bank can make? $ 2b. Show in columns (3) and (3') below how the bank's balance sheet will appear after the bank has lent this additional amount. 2c. By how much has the supply of money changed? 2d. How will the bank's balance sheet appear after checks drawn for the entire amount of the new Ioans have been cleared against the bank? Show this new balance sheet in columns (4) and (4'). Case 1: The reserve ratio (R)=20%. 1a. What is the maximum amount of new loans that Big Bucks Bank can make? 1b. Show in columns (1) and (1') how the bank's balance sheet will appear after the bank has lent this additional amount. 1c. By how much has the supply of money changed? \$ 1d. How will the bank's balance sheet appear after checks drawn for the entire amount of the new Ioans have been cleared against the bank? Show the new balance sheet in columns (2) and (2'). Case 2: The reserve ratio (R)=15%. 2a. Using the original figures, revisit questions a,b, and c based on the assumption that the reserve ratio (R) is 15%. What is the maximum amount of new loans that this bank can make? $ 2b. Show in columns (3) and (3') below how the bank's balance sheet will appear after the bank has lent this additional amount. 2c. By how much has the supply of money changed? 2d. How will the bank's balance sheet appear after checks drawn for the entire amount of the new Ioans have been cleared against the bank? Show this new balance sheet in columns (4) and (4')

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