1 Decisions for Tomorrow Suppose a person who is developing a card game crowdfunds $20,000 and holds this as cash for futureexpenses. If this $20,000 comes from donors' checking accounts, by how much will the money supply fall if the reserve ratio is 10percent?Instructions: Enter your response as a whole number.The money supply will decrease by $ 200,000Assume the banking system contains the following amounts. Use this information to answer five questions.Total reservesTransactions depositsCash held by publicReserve requirementc. What would the lending capacity of the banking system be after this deposit?$$80 billion$800 billion$400 billion0.10$100 billiond. How large would the money supply be if the banks fully utilized their lending capacity?1180 billionive A412

given reserve ratio = 10% crowd funds $20,000

Decisions for Tomorrow Suppose a person who is developing a card game crowdfunds $20,000 and holds this as cash for future expenses. If this $20,000 comes from donors' checking accounts, by how much will the money supply fall if the reserve ratio is 10 percent? Instructions: Enter your response as a whole number. The money supply will decrease by $ 200,000

Decisions for Tomorrow Suppose a person who is developing a card game crowdfunds $20,000 and holds this as cash for future expenses. If this $20,000 comes from donors' checking accounts, by how much will the money supply fall if the reserve ratio is 10 percent? Instructions: Enter your response as a whole number. The money supply will decrease by $ 200,000

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter12: Money, Banking And The Financial System

Section: Chapter Questions

Problem 8WNG

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You just deposited $4,000 in cash into a checking account at the local bank. Assume that banks lend out all excess reserves and there are no leaks in the banking system. That is, all money lent by banks gets deposited in the banking system. Round your answers to the nearest dollar. If the reserve requirement is 20%, how much will your deposit increase the total value of checkable bank deposits? If the reserve requirement is 8%, how much will your deposit increase the total value of checkable deposits? Increasing the reserve requirement decreases the money supply. %24 %24
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The task I am struggling with: Tracy Williams deposits $500 that was in her sock drawer into a checking account at the local bank. The reserve ratio is 10%. a) how dies the deposit initially change the T-account of the local bank? How does it change the money supply? b) If the bank maintains a reserve ratio of 10%, how will it respond to the new deposit? c) if every time the bank makes a loan, the loan results in a new checkable bank deposit in a different bank equal to the amount of the loan, by how much could the total money supply in the economy expand in response to Tracy´s initial cash deposit of $500? Thank you very much for your help.
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Third National Bank has reserves of $20,000 and checkable deposits of $200,000. The reserve ratio is 10 percent. Households deposit $5,000 in currency into the bank, and the bank adds that currency to its reserves. What amount of excess reserves does the bank now have? Instructions: Enter your answer as a whole number. %24
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Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 10%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited (Dollars) 500,000 Change in Excess Reserves (Dollars) Change in Required Reserves (Dollars) Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Neha, who immediately uses the funds to write a check to Lorenzo. Lorenzo deposits the funds immediately into his checking account at Walls Fergo Bank. Then Walls Fergo Bank lends out all of its new excess reserves to Andrew, who writes a check to Teresa, who deposits the money into her account at PJMorton Bank. PJMorton lends out all of its new excess reserves to Beth in turn. Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dollar. Southeast Mutual Bank Walls Fergo Bank PJMorton Bank Increase in Deposits…