60.1K

Verified Solution

Link Copied!

Please help me complete the chart as well! thank you

Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system and that all figures are in billions of dollars. The reserve ratio is 10 percent. Instructions: Refer to the balance sheet below. Enter your answers as whole numbers a. What is the amount of excess reserves in this commercial banking system? Answer is complete but not entirely correct. 40 billion What is the maximum amount the banking system might lend? Answer is complete but not entirely correct. 400 billion $ Show in columns 1(a) and 1'(a) how the consolidated balance sheet would look after this amount has been lent. What is the size of the monetary multiplier? Answer is complete and correct. 10 b. Using the original figures, answer the questions in part a assuming the reserve ratio is 5 percent. What is the amount of excess reserves in this commercial banking system? Answer is complete but not entirely correct 50 billion What is the maximum amount the banking system might lend? Answer is complete but not entirely correct 1,000 billion Show in columns 1(b) and 1'(b) how the consolidated balance sheet would look after this amount has been lent. What is the monetary multiplier? Answer is complete and correct. 20 What is the resulting difference in the amount that the commercial banking system can lend when the required reserve ratio is 5 percent rather than 10 percent? Answer is complete but not entirely correct 600 billion Answer is not complete. Liabilities and net worth Assets (a) (b) (a) (b) 1 Checkable Reserves $ $ 58 200 deposits Securities 42 Loans 100

Answer & Explanation Solved by verified expert

See Answer