00:01
Okay, question four.
00:03
B .s .b.
00:04
Holds $250 million in deposits and maintains a reserve ratio of 10%.
00:14
Okay, so a, we have to show a t account for bsp.
00:20
Oh, sorry.
00:21
So first of all, we write down the deposit on the right hand side, which is $250 million.
00:35
So since the reserve ratio is 10%, so 10 % of this 250 million is $25 million, which means that the difference between this deposit and reserve is the money that this bank can loan out to other people.
01:02
So this is going to be $225 million.
01:07
Okay, so question b, suppose now that the largest depositor withdraws 10 million in cash from her account.
01:19
So it means that the new t bill is going to be, so i just, okay, i still write deposit here.
01:27
If she withdrew 10 millions out of this $250 million, it is going to be $240 million.
01:36
So if the bank is going to maintain the reserve ratio, which is also 10%, the reserve on the left hand side should be $24 million, while the loan decrease to $216 million.
02:07
All right, a and b.
02:10
So c, explain what effect bsb's action will have on other banks.
02:19
So we can compare this to t e account.
02:22
We see that from black to blue, the long decrease by $9 million...