Question
The following balance sheet for All Banks Combined, Column 1 serves as a starting point.Fill in the blanks, assuming a closed economy-not a Global economy
The following balance sheet for "All Banks Combined", Column 1 serves as a starting point.Fill in the blanks, assuming a closed economy-not a Global economy exists. 12
Assets
Vault Cash$9,000$9,000
Reserves at Fed Res30,000__
Required28,500
Excess1,500
Federal Funds Sold45,00045,000
Loans600,000600,000
Securities175,000177,000
Other Assets178,000178,000
Total Assets$1,037,000
Liabilities
Demand Deposits$375,000
Time Deposits437,000437,000
FF Purchased105,000105,000
Loans, Discounts and Advances1,5001,500
Other Liabilities43,50043,500
Capital Account75,00075,000
Total Liabilities$1,037,000
Assume that reserve requirements are 10% on demand deposits and 0% on time deposits.Please fill in the combined balance sheet for banks for the fiscal policy problem.
a.Fill in column 2 with this part.(Assume column 1 is the starting position.)Because of the nature of the economy and the large federal deficit, the U.S. Government finances a $5,000 deficit by selling $2,000 of new bonds to banks and $3,000 of new bonds to non-banks. How would your answer possibly change in a Global economy?
_ securities_ securities
_ DD
Private Sector
Banks
_3,000_ Demand Deposits
Bank RR = .10 (_)- 9,000 = ____
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