1.
Write your answers in the space provided. Show your work below.
Consider the partial bank balance sheet. Required reserve ratio is 20%.
Assets
Liabilities and Owners' Equity
Reserves
$20,000 Deposits
$100,000
Loans
$8,000 Debt
$800
Short-term securities $800 Capital(owner's equity) $200
Answers
Questions
a. What are required reserves?
b. What are excess reserves?
c. If households deposit $5000, what are the new reserves?
d. If households deposit $5000, what are the new excess reserves?