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C,d, e only please solve Sewell Bank has the simplified balance sheet belovw Assets Liabilities Required reserves Excess reserves Customer loans S10,00 $10,00 S2,000 Demand

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image text in transcribedC,d, e only please solve
Sewell Bank has the simplified balance sheet belovw Assets Liabilities Required reserves Excess reserves Customer loans S10,00 $10,00 S2,000 Demand d wner's equity $8,000 overnment securities (bonds) $7,000 S3,000 Building and fixtures (a) Is the Sewell Bank's balance sheet identity held? Prove your answe (b) Suppose that an individual deposits $5,000 in cash into her checking (demand deposit) account in this bank. (i) What is the immediate effect of the cash deposit on the Ml measure of the money supply? Explain your answer (ii) What will be the immediate changes in Sewell Bank's balance sheet? Explain. Draw the new Sewell Bank's balance sheet. Is now the balance sheet identity held? Prove your answer (iii) What is the maximum amount of money the Sewell Bank can now loan out? Explain how you determined this amount (iv) What is the maximum change in the amount of money supply as a result of the S5,000 deposit by the individual? Give the two ways of calculations (v) Without using mathematical formula, explain in words why this deposit can lead to a greater-than-S5,000 increase in the money supply (vi) Give two reasons why the money supply may not increase by the amount you identified in point (v) (vii) Would your answers on points (iii) and (iv) change, if it is not a citizen of the country, who deposits his cash in the bank, but a stranger, who arrives from outside this economic system and deposits $5,000 of acceptable currency that has never been in the system before

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