MHM Bank currently has $850 million in transaction deposits on its balance sheet. The current reserve requirement is 8 percent, but the Federal Reserve is increasing this requirement to 10 percent. a. Show the balance sheet of the Federal Reserve and MHM Bank if MHM Bank converts all excess reserves to loans, but borrowers return only 60 percent of these funds to MHM Bank as transaction deposits. b. Show the balance sheet of the Federal Reserve and MHM Bank if MHM Bank converts 70 percent of its excess reserves to loans and borrowers return 85 percent of these funds to MHM Bank as transaction deposits. Complete this question by entering your answers in the tabs below. Required A Required B Show the balance sheet of the Federal Reserve and MHM Bank if MHM Bank converts all excess reserves to loans, but borrowers return only 60 percent of these funds to MHM Bank as transaction deposits. (Enter your answers in millions. Do not round intermediate calculations. Round your "Panel B" answers to 3 decimal places. (e.g., 32.161) Panel A: Initial Balance Sheets Federal Reserve Bank Assets Liabilities $ 68 million $ 68 million MHM Bank Assets Liabilities $ 782 million $ 850 million 681 million Panel B: Balance Sheet after All Changes Federal Reserve Bank Assets Liabilities million million MHM Bank Assets Liabilities million million million MHM Bank currently has $850 million in transaction deposits on its balance sheet. The current reserve requirement is 8 percent, but the Federal Reserve is increasing this requirement to 10 percent. a. Show the balance sheet of the Federal Reserve and MHM Bank if MHM Bank converts all excess reserves to loans, but borrowers return only 60 percent of these funds to MHM Bank as transaction deposits. b. Show the balance sheet of the Federal Reserve and MHM Bank if MHM Bank converts 70 percent of its excess reserves to loans and borrowers return 85 percent of these funds to MHM Bank as transaction deposits. Complete this question by entering your answers in the tabs below. Required A Required B Show the balance sheet of the Federal Reserve and MHM Bank if MHM Bank converts 70 percent of its excess reserves to loans and borrowers return 85 percent of these funds to MHM Bank as transaction deposits. (Enter your answers in millions. Do not round intermediate calculations. Round your "Panel B" answers to 3 decimal places. (e.g., 32.161)) Panel A: Initial Balance Sheets Federal Reserve Bank Assets Liabilities $ 68 million $ 68 million MHM Bank Assets Liabilities 850 million 782 million 68 million Panel B: Balance Sheet after All Changes Federal Reserve Bank Assets Liabilities million million MHM Bank Assets Liabilities million million million
