Question

By using the table, Balance Sheet Assets ($) Liabilities ($) Vault Cash 7500 Deposits 25000 Loans 17500 Total Assets 25000 Total Liabilities 25000 1. If the required reserve ratio is 25 percent, what is the required reserve? 2. Refer to the balance sheet above. If the required reserve ratio is 25 percent, what is the maximum loan that the bank can newly make? 3. After the new loan, make a new balance sheet. By using the table, Lender (Depositor) Bank (New) Deposit ($) Required Reserves ($) Excess Reserves ($) (Loans) Borrower Adam Bank A 35000 22750 Stacey Stacey Bank B Marie Marie Bank C John (continue) 4. What is the reserve requirement ratio? 5. Before making loan to Stacey, what is the change in the net money supply with the initial deposit of 35,000 in Bank A? 6. By using the reserve requirement ratio (#4), complete the table.

          By using the table,
Balance Sheet
Assets ($) Liabilities ($)
Vault Cash 7500 Deposits 25000
Loans 17500
Total Assets 25000 Total Liabilities 25000
1. If the required reserve ratio is 25 percent, what is the required reserve?
2. Refer to the balance sheet above. If the required reserve ratio is 25 percent, what is the maximum loan that the bank can newly make?
3. After the new loan, make a new balance sheet.
By using the table,
Lender (Depositor) Bank (New) Deposit ($) Required Reserves ($) Excess Reserves ($) (Loans) Borrower
Adam Bank A 35000 22750 Stacey
Stacey Bank B Marie
Marie Bank C John
(continue)
4. What is the reserve requirement ratio?
5. Before making loan to Stacey, what is the change in the net money supply with the initial deposit of 35,000 in Bank A?
6. By using the reserve requirement ratio (#4), complete the table.

By using the table,
Balance Sheet
Assets () Liabilities ()
Vault Cash 7500 Deposits 25000
Loans 17500
Total Assets 25000 Total Liabilities 25000
1. If the required reserve ratio is 25 percent, what is the required reserve?
2. Refer to the balance sheet above. If the required reserve ratio is 25 percent, what is the maximum loan that the bank can newly make?
3. After the new loan, make a new balance sheet.
By using the table,
Lender (Depositor) Bank (New) Deposit () Required Reserves () Excess Reserves () (Loans) Borrower
Adam Bank A 35000 22750 Stacey
Stacey Bank B Marie
Marie Bank C John
(continue)
4. What is the reserve requirement ratio?
5. Before making loan to Stacey, what is the change in the net money supply with the initial deposit of 35,000 in Bank A?
6. By using the reserve requirement ratio (#4), complete the table.

Added by Abigail H.

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