Q1: For the following questions, assume there is a 10% required reserve ratio: a. A bank has $200 of reserves, $200 of loans and $400 of deposits, how much excess reserves are they holding? How much could the bank make in additional loans right now? How much will the money supply increase after the money creation process is finished? b. A bank has total reserves of $450 and excess reserves of $150. What is the bank's current deposit balance? What is the bank's current loan balance? What is the maximum amount of deposits this bank can have? Q2: A simplified balance sheet for the local bank is shown below. The required reserve ratio is 20%. All figures are in thousands Assets Liabilities and net worth Reserves Checkable $1000 deposits $4000 Securities 1000 Stock shares 1000 Loans 2500 Property 500 1. How much is this bank currently required to hold in reserve? How much does the bank currently hold in excess reserves? 2. Suppose the bank lends out the full amount of its excess reserves. Modify the balance sheet to reflect the creation of the loan. 3. By how much has the money supply increased as a result of the loan? 4. Suppose the borrower of the new loan writes a check for the amount of the loan to purchase new equipment for her business. The equipment seller then deposits the check in an out-of-town bank. Show the new balance sheet for this local bank once the check has cleared. 5. Once the check has cleared, does the local bank have any excess reserves? Q3: What is the national unemployment rate in Pakistan? Find the unemployment rate for the demographic group that best fits a description of you (for example, based on age, sex, rural/urban etc). Is it higher or lower than the national average? Why do you think this is so? List the sources of your data