Suppose that Big Bucks Bank has the simplified balance sheet shown below. The reserve ratio is 20 percent. Instructions: Enter your answers as whole numbers. a. What is the maximum amount of new loans that Big Bucks Bank can make?

Show in columns 1 and 1' how the bank's balance sheet will appear after the bank has lent this additional amount.

Assets				Liabilities and net worth
		(1)	(2)			(1')	(2')
Reserves	$25,000	?	?	Checkable deposits	$100,000	?	?
Securities	38000	?	?
Loans	37000	?	?

b. How will the banks balance sheet appear after checks drawn for the entire amount of the new loans have been cleared against the bank? Show the new balance sheet in columns 2 and 2'. d. Using the original figures, revisit questions a and b based on the assumption that the reserve ratio is now 15 percent. What is the maximum amount of new loans that this bank can make?

Show in columns 3 and 3' (below) how the banks balance sheet will appear after the bank has lent this additional amount.

Assets				Liabilities and net worth
		(3)	(4)			(3')	(4')
Reserves	$25,000	?	?	Checkable deposits	$100,000	?	?
Securities	38000	?	?
Loans	37000	?	?

How will the banks balance sheet appear after checks drawn 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.