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The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of 2.5%. Assets
The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of 2.5%. Assets Reserves $ Liabilities/Equity Demand Deposits Shareholders' equity $ $900,000 100,000 Loans Securities Fixed assets Total $25,000 773,000 100,000 102,eee 1,000,000 Total 1,000,000 a. The amount of excess reserves is $ b. The maximum amount that loans and deposits could be increased by is $ c. Assume that the system becomes fully loaned up. Show the new balance sheet in the table above. d. Now that the system is fully loaned up, the money supply will have increased by $|
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