Questions are listed below.
11 Suppose that Big Bucks Bank has the simplified balance sheet shown below. The reserve ratio is 20 percent. Answer is complete but not entirely correct. Liabilities and net worth (1) (2) (1) (27 Reserves $ 23,000 20,000 * $ 23,000 Checkable deposits 100.000 100.000 103.090 Securities 38,000 Loans 39.000 42,000 42.000 Instructions: Enter your answers as a whole number. a. What is the maximum amount of new loans that Big Bucks Bank can make? $ 3000 0 Using the table above, show in columns 1 and I' how the bank's belonce sheet will appear after the bank has lent this additional amount by inserting the new values into the gray shaded cells of the given table. b. By how much has the money supply changed? $ 3000 0 :. How will the bank's balance sheet appear after checks drown for the entire amount of the new loans have been cleared against the bank? Show the new balance sheet in columns 2 and 2" by inserting the new values into the gray shoded cells of the given table. d. Using the original figures, revisit questions a, b, and cbased on the assumption that the reserve ratio is now 15 percent Answer is complete but not entirely correct. Angate Liabilities and net worth (3) (4) Reserves $ 23,000 15,000 $ 23,000 Checkable deposits 100.000 100.090 108.090 Securities 38,000 38,000 38 000 Loans 39.00 47.000 47,000 What is the maximum amount of new loans that this bank con make? $ 8000 0 Show in columns 3 and 3" how the bank's balance sheet will appear after the bank has lent this additional amount. Add the new values into the gray shaded cells of the given table. By how much has the money supply changed? $ 8000 0 How will the bank's balance sheet appear after checks drown for the entire amount of the new loans have been cleared against the bank? Show the new balance sheet in columns 4 and 4' in the table above. Add the new values into the grey shoded cells of the given table.12 Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system and that all figures are in billions of dollars. The reserve ratio Is 10 percent. Assets Liabilities and net worth Book (a) (b) a ) ( b ) Reserves 60 Checkable deposits $ 200 Securities 40 oans 100 Instructions: Enter your answers as a whole number. a. What is the amount of excess reserves in this commercial banking system? $ billion What is the maximum amount the banking system might lend? $[ billion Show In columns 1(a) and 1'(a) how the consolidated balance sheet would look after this amount has been lent. Enter these new values In the gray shaded cells of the given table What is the size of the monetary multiplier? b. Using the original figures, answer the questions In part a assuming the reserve ratio is 5 percent What is the amount of excess reserves In this commercial banking system? $ billion What is the maximum amount the banking system might lend? billion Show In columns 1(b) and 1'(b) how the consolidated balance sheet would look after this amount has been lent. Enter these new values In the gray shaded cells of the given table What is the monetary multiplier? What is the resulting difference in the amount that the commercial banking system can lend when the required reserve ratio Is 5 percent rather than 10 percent? It can lend $ billion [Click to select) v ]
