Question
I cant figure out this assignment at all! Any help would be great! The following balance sheet is for Big Bucks Bank. The reserve ratio
I cant figure out this assignment at all! Any help would be great!
The following balance sheet is for "Big Bucks Bank." The reserve ratio is 20%.
Assets Liabilities and Net Worth__________
Reserves: $22,000 Checkable Deposits: $100,000
Securities: $38,000
Loans: $60,000 Net Worth: $20,000
- What is the maximum amount of new loans that Big Bucks Bank can make?
- By how much will the money supply change if Big Bucks makes those loans?
- How will Big Bucks balance sheet look after checks drawn for the entire amount of the new loans have cleared Big Bucks Bank:
Assets Liabilities and Net Worth__________
Reserves: $___________Checkable Deposits:_____________
Securities: $___________
Loans: $______________
- Answer Questions a, b, and c again, on the assumption that the reserve ratio is 15%.
Assets Liabilities and Net Worth__________
Reserves: $___________Checkable Deposits:_____________
Securities: $___________
Loans: $______________
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