Question
The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of 7.5%. Assets
The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of 7.5%.
| Assets | Liabilities/Equity | ||||
| Reserves | $78,000 | $ 78000 Numeric ResponseEdit Unavailable. 78000 correct. | Demand Deposits | $900,000 | $ 1039996.5 Numeric ResponseEdit Unavailable. 1039996.5 incorrect. |
| Loans | 720,000 | 859996.5 Numeric ResponseEdit Unavailable. 859996.5 incorrect. | Shareholders' equity | 100,000 | 100000 Numeric ResponseEdit Unavailable. 100000 correct. |
| Securities | 100,000 | 100000 Numeric ResponseEdit Unavailable. 100000 correct. | |||
| Fixed assets | 102,000 | 102000 Numeric ResponseEdit Unavailable. 102000 correct. | |||
| Total | 1,000,000 | 1139996.5 Numeric ResponseEdit Unavailable. 1139996.5 incorrect. | Total | 1,000,000 | 1139996.5 Numeric ResponseEdit Unavailable. 1139996.5 incorrect. |
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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Accounting Essentials For Hospitality Managers
Authors: Chris Guilding
3rd Edition
0415841097, 978-0415841092
