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Monetary Policy T-Chart Assignment Assets Liabilities & Net Worth Reserves 1200 Loans 2500 Demand Deposits 4000 Securities 300 1) If the reserve requirement is 20%,
Monetary Policy T-Chart Assignment Assets Liabilities & Net Worth Reserves 1200 Loans 2500 Demand Deposits 4000 Securities 300 1) If the reserve requirement is 20%, does this bank have any excess reserves? 2) How much can this bank safely loan out? 3) If a customer withdraws $1000 in cash, demonstrate the change in the t-chart for this 4) What is the value of the money multiplier in this problem? Assets Liabilities & Net Worth Reserves 2500 Demand Loans 5500 Deposits 10,000 Securities 2000 Net Worth 3000 Land 3000 1) If the reserve requirement is 10%, how much can this bank safely loan out? 2) If the FED is interested in slowing down the economy, what open market operation should the FED conduct? 3) Why would this bank elect to hold securities or land instead of loans? 4) What are two reasons (called leakages) that would keep the money supply from reaching its maximum change from a new loan? Assets Liabilities & Net Worth Reserves 4500 Loans 7500 Demand Deposits 12000 Securities 2000 Net Worth 3000 Land 1000
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