Assign12 - Economics 100 Assignment#12 Money Banking...

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Economics 100 Assignment #12 Money, Banking, Monetary Policy 1. The simplified balance sheet for a chartered bank is as follows: Assets Liabilities Reserves 900 Deposits 9,000 Loans 9,050 Capital 950 a) If the bank has no excess reserves, what is the bank’s target reserve ratio? b) If there is a new deposit at this bank of $100, what will be the immediate impact on the bank’s balance sheet? Does the bank have excess reserves? What will be the impact on the bank’s balance sheet after the bank re-establishes its target reserve ratio? c) If all banks have this same target reserve ratio, what is the maximum change in the deposits of the banking system as a whole as a result of this new deposit? Why? 2. Simon purchases a bond, newly issued by the Amalgamated Corporation for $100. The bond pays $7 to its holder at the end of the first and second years and pays $107 upon its maturity at the end of the third year. a)
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This note was uploaded on 02/29/2012 for the course ECON 101 taught by Professor Unknown during the Fall '10 term at University of Toronto.

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Assign12 - Economics 100 Assignment#12 Money Banking...

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