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Question #5 - The following is the balance sheet of the whole banking system (all figures are in $billions) which has a target reserve ratio
Question #5 - The following is the balance sheet of the whole banking system (all figures are in $billions) which has a target reserve ratio of 20 percent: Assets Liabilities and Equity Reserves $120 Demand deposits $600 Loans 400 Equity 100 Securities 130 Land & Buildings 50 a) At present, what is the amount of excess reserves of the commercial banking system? b) Assume that a cash deposit of $20 is made into a chequing account in the banking system. As a result, what will be the amount of excess reserves? After the deposit of $20, what is the m imum amount by which this commercial banking system can expand the upply of money
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