Required reserves = $45 million
Excess reserves = $15 million
Deposits = $750 million
Loans = $600 million
Treasury bonds = $90 million
Show that the balance sheet balances if these are the only assets and liabilities.
Assuming that people hold no currency, what happens to each of these values if the central bank changes the reserve requirement ratio to 3%, banks still want to hold the same percentage of excess reserves, and banks don't change their holdings of Treasury bonds? How much does the money supply change by?
Recently Asked Questions
- Selected information from the accounting records of the Vigor Company is as follows : Net accounts receivable at December 31 , 2016 900,000 Net accounts
- A firm forecasted sales of P3,000 in April , P4,500 in May , and P6,500 in June . All sales are on credit . 30 % is collected the month of sale and the
- A student is paying off a loan with one payment of $ 2,590.06 to be made at the end of 3 years time . It is agreed that , instead of paying off the loan with