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I would like to compare my answers. Please help me. Thank you 3. A chartered bank Bank of Bhanji has the following items in its
I would like to compare my answers. Please help me. Thank you
3. A chartered bank Bank of Bhanji has the following items in its balance sheet; cash reserves - $60,000, loans - $140,000, securities- $100,000, demand deposits - $300,000 a) Does the Bank of Bhanji currently have any excess reserves? If so, how much does it have? (2) b) Now assume that Maiah deposits $10,000 into the bank. Show on the balance sheet how this deposit changes things. (2) c) Does the Bank of Bhanji have any excess reserves after this deposit by Maiah? If so, how much? (2) d) If Doga is granted a loan by the exact amount of current excess reserves, how does the balance sheet change if the money is deposited into her account? (2) e) If she then buys a pony with the loan money, how does the balance sheet change after the cheque has cleared? (2) f) Using the money multiplier, what is the total increase in the money supply created from this loan? (2) g) What if instead, the Bank of Canada bought $10,000 of securities from the Bank of Bhanji? How does this change the balance sheet? How much will the money supply increase by once a loan is made in this case? (3)
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