Question 1

Suppose Yukon Bank has the following simplified balance sheet and that the desired reserve ratio Is 20 percent. Instructions: All answers to this question should be entered as whole numbers. Assets Liabilities and net worth 10 (1 ) (2) (1' ) (2') points Cash reserves $22,000 Deposits $100, 000 Skipped Securities 38,000 Loans 40, 900 a. What is the maximum amount of new loans Yukon Bank can make? eBook $ Show in columns 1 and 1' how the bank's balance sheet will appear after the bank has loaned this additional amount. Print b. By how much has the supply of money changed? References c. How will the bank's balance sheet appear after cheques drawn for the entire amount of the new loans have been cleared against this bank? Show this new balance sheet in column 2 and 2' d. Answer parts (a), (b), and (c) on the assumption that the desired reserve ratio is 15 percent. What is the maximum amount of new loans Yukon Bank can make? $[ Show in columns 3 and 3' (below) how the bank's balance sheet will appear after the bank has loaned this additional amount. By how much has the supply of money changed? $ Assets Liabilities and net worth (3) (4) (3' ) (4') Cash reserves $22,000 Deposits $100, 000 $ Securities 38, 000 Loans 40, 000 How will the bank's balance sheet appear after cheques drawn for the entire amount of the new loans have been cleared against this bank? Show this new balance sheet in column 4 and 4' In the table above