Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 10%.
Hint: If the change is negative, be sure to enter the value as negative number.
Amount Deposited Change in Excess Reserves Change in Required Reserves
(Dollars)
500,000
(Dollars)
(Dollars)
Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Juanita, who immediately uses the funds to write a check to Gilbe
Gilberto deposits the funds immediately into his checking account at Walls Fergo Bank. Then Walls Fergo Bank lends out all of its new excess reser
to Sam, who writes a check to Neha, who deposits the money into her account at PJMorton Bank. PJMorton lends out all of its new excess reserves
Teresa in turn.
Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dollar.
Increase in Deposits Increase in Required Reserves Increase in Loans
(Dollars)
(Dollars)
(Dollars)
