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# Question 8 The balance sheet belo'r.I shows the ee-ct of a new alooc deposit in Bank A. Assume that the commercial banks have established a 9 percent...

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Question 8 The balance sheet belo'r.I shows the eﬁe-ct of a new alooc deposit in Bank A. Assume that the commercial banks have
established a 9 percent desired reserve and that no bank holds excess reserves. 15 points
BANK A
Number Help
Assets Uebilities
Reserves 3,000 Deposits 3.00:] Loans 0 Assume that Bank A lends its excess reserves to Mr. Jones who spends the proceeds of the loan. Show Bank A's new balance sheet
BANKA
Assets Uabilities
Reserves Number Deposits Number Loans Number The money Mr. Jones borrows is deposited in Bank BA Bank B lends Its excess reserves to Mr. Smith; Show Bank B's
balance sheetafter Ihe loan has been made out.

BANKB Assels Liabilities Reserves; Number : Deposits: Number LOEHS. Number The money Mr. Smlth borrows is deposited in BenkC. Bank C lends lls excess reserves to Mr. Black. Show Bank US
balance sheeleﬁer me loan has been made out. BANKc
Assets Uebilllles
Reserves; Number I 09m Number Loans Number The money Mr. Black borrows ls deposited in Bank D. Bank D lends ils &quot;SS reserves to Mr. Green. Show Bank D's
balance sheelaﬁer the loan has been made out.

BANKD Assels Uabil Ilies Reserve-5' Number Den-mills Number LoanS' Number if the above process oonljnues to completion the following totals will exist for the banking system: Part 7: Deposits Number Part8: Reserves Number H Part 9: Loans 'Nb—rnber

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