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Consider the balance sheet for the Georgia bank as presented below. Georgia Bank Balance Sheet Assets Liabilities Government securities $1,600 Checking accounts $4,000 Required Reserves

Consider the balance sheet for the Georgia bank as presented below.

Georgia Bank Balance Sheet

Assets

Liabilities

Government securities

$1,600

Checking accounts

$4,000

Required Reserves

$400

Net Worth

$1,000

Excess Reserves

$0

 

 

Loans

$3,000

 

 

Total Assets

$5,000

Total Liabilities

$5,000


Using a required reserve ratio of 10% and if the bank keeps no excess reserves, write the changes to the balance sheet for each of the following scenarios:

Steve withdraws $200 from his checking account.

The Fed buys $2,000 in government securities from the bank.

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