Assets Liabilities & Net Worth
Cash $ 10,000 Checkable
deposits $ 500,000
at the Fed 190,000 Stock
balance sheet above to answer the following questions. Assume the required reserve ratio is 10%.
a. This commercial
bank has total reserves of: ___________________________
b. This commercial
bank has required reserves of: ___________________________
c. This bank can safely expand its loans by a
maximum of: ___________________________
d. The monetary multiplier is: ___________________________
Using the bank
balance sheet above, assume that the bank makes a loan of $20,000 from vault
e. The bank's reserves now total: ___________________________
is the value of all the assets after the loan?
the original bank balance sheet above, assume that the bank makes a loan
g. The bank will then have excess reserves of: ___________________________
use the original balance sheet above.
If the original bank balance sheet was
for the commercial banking
rather than a single bank, the maximum amount by which this
system can expand the supply of money by