ecn204-05-problems

ecn204-05-problems - ECN 204 - Winter 2008 Brennan Thompson...

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Unformatted text preview: ECN 204 - Winter 2008 Brennan Thompson Practice Problems for Topic 5 1. The balance sheet below is for the ABC National Bank. Assume the desired reserve ratio is 20 percent. Assets Liabilities and Net Worth Reserves $27,000 Demand deposits $110,000 Loans 50,000 Capital stock 200,000 Property 233,000 What is the maximum amount that this bank can safely expand its loans by? 2. Suppose the a chartered bank has actual reserves of $2 million, excess reserves of $0.5 million, and a desired reserve ratio of 10%. What is the size of this banks demand deposits? 3. Assume that a chartered bank has demand deposits of $40,000, reserves of $22,000, and loans of $30,000. If this bank has no other assets or liabilities, what is its net worth? 4. The balance sheet below is for the First Edmonton Bank. Assets Liabilities and Net Worth Reserves $20,000 Demand deposits $100,000 Loans 40,000 Capital stock 50,000 Property 90,000 If this bank finds that it has excess reserves of $6 million, what is its desired reserve...
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ecn204-05-problems - ECN 204 - Winter 2008 Brennan Thompson...

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