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Consider the balance sheet of the following bank. Chase Reserves 3000 Checkable Deposits 5000 Loans 7000 Savings and Time Deposits 8000 Bond Holdings 4000 Equity
Consider the balance sheet of the following bank. Chase Reserves 3000 Checkable Deposits 5000 Loans 7000 Savings and Time Deposits 8000 Bond Holdings 4000 Equity 1000 Using balance sheets, show all the balance sheet steps of Chase making a loan of $1000. Provide a brief explanation for each step and assume that the loan check is re-deposited in another bank (provide a balance sheet for that bank as well). How does the money supply (M2) change as a result (6 points)
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