ps_ch22_a - a) Draw a T account for this bank and show the...

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Problem Set For Chapter 22 - a The Money Supply and The Federal Reserve System 1) Draw a T – account for a bank and write in the typical items that one would find on either side. Note : Typical items include Demand Deposits Cash Reserves Government Bonds Loans 2) If the required reserve ratio is 20 % and a bank has $ 1 million in demand deposits, how much reserve must the bank keep with the Central Bank? 3) Assume that Bank of ZTB open its doors to depositors and receives $ 100.000 in cash deposits. Assume the required reserve ratio is 20 %.
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Unformatted text preview: a) Draw a T account for this bank and show the current situation. b) How much is excess reserves? c) Could this bank make a loan of $ 90.000? d) If the required reserve ratio is 10 %, how would your answer to b change? 4) Why the barter system is inefficient? 5) Which of the following are money and which are not? a) A credit card b) A dollar bill c) Funds in a checking account 6) What are the differences between the medium of exchange, store of value, and unit of account roles of money?...
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