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Money_and_Banking_Exercise

Money_and_Banking_Exercise - RE = VC DCB =20 30 = 50 Bank A...

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Bank A Assets Liabilities VC……… .... 20 DD……….500 DCB……….30 TD…………..0 S………….250 L…………….0 L………….200 500 500 All Other Banks Assets Liabilities VC…… ...... 480 DD……..9,500 DCB……...470 TD…………..0 S…… ..... 2,750 L…………….0 L………..5,800 9,500 9,500 Consolidated CBs Assets Liabilities VC…… ...... 500 DD……10,000 DCB……...500 TD…………..0 S…… ..... 3,000 L…………….0 L………..6,000 10,000 10,000 FED Assets Liabilities Misc.……….70 CU………….0 VC .... …….500 S………….930 DCB……..500 L……………..0 1,000 1,000 RE = VC + DCB =20 + 30 = 50 RR = r DD × DD + r TD × TD = 0.10 × 500 + 0.05 × 0 = 50 For Bank A: XR = RE – RR = 50 – 50 = 0
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Problem 1: Bank A All Others Consolidated RE RR XR M1 = _________________ M2 = _________________ 50 50 950 1,000 950 1,000 0 0 0 10,000 10,000 M1 = CU + DD = 0 + 10,000 M2 = CU + DD + TD = 0 + 10,000 + 0
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Bank A Assets Liabilities VC……… .... 20 DD……….500 DCB……….30 TD…………..0 S………….250 L…………….0 L………….200 500 500 All Other Banks Assets Liabilities VC…… ...... 480 DD……..9,500 DCB……...470 TD…………..0 S…… ..... 2,750 L…………….0 L………..5,800 9,500 9,500 Consolidated CBs Assets Liabilities VC…… ...... 500 DD……10,000 DCB……...500 TD…………..0 S…… ..... 3,000 L…………….0 L………..6,000 10,000 10,000 FED Assets Liabilities Misc.……….70 CU………….0 VC .... …….500 S………….930 DCB……..500 L……………..0 1,000 1,000 +20 +20 +20 Problem 2: OMP
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Bank A Assets Liabilities VC……… .... 20 DD………. 520 DCB………. 50 TD…………..0 S………….250 L…………….0 L………….200 520 520 All Other Banks Assets Liabilities VC…… ...... 480 DD……..9,500 DCB……...470 TD…………..0 S…… ..... 2,750 L…………….0 L………..5,800 9,500 9,500 Consolidated CBs Assets Liabilities VC…… ...... 500 DD…… 10,020 DCB……... 520 TD…………..0 S…… ..... 3,000 L…………….0 L………..6,000 10,020 10,020 FED Assets Liabilities Misc.……….70
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