Scenario: Assets and Liabilities of the Banking System Assets Loans Reserves Reference Ref 14-12 O $111.111 O $250,000 $900,000 100,000 O $666,667 O $1 million Liabilities Deposits (Scenario: Assets and Liabilities of the Banking System) Suppose that the reserve ratio is 10% when the Fed buys $100,000 worth of U.S. Treasury bills from the banking system. If the banking system does NOT want to hold any excess reserves. will be added to the money supply. $1,000,000

Scenario: Assets and Liabilities of the Banking System Assets Loans Reserves Reference Ref 14-12 O $111.111 O $250,000 $900,000 100,000 O $666,667 O $1 million Liabilities Deposits (Scenario: Assets and Liabilities of the Banking System) Suppose that the reserve ratio is 10% when the Fed buys $100,000 worth of U.S. Treasury bills from the banking system. If the banking system does NOT want to hold any excess reserves. will be added to the money supply. $1,000,000

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: The Monetary System

Section: Chapter Questions

Problem 5PA

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In a program of deposit insurance as it is operated in the United States, what is being insured and who pays the insurance premiums?
Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 44Deposits 255Loans 155 Securities 51Other $X Using the balance sheet above, find the level of excess reserves this bank is holding if the required reserve ratio = 6%(Give answers to 2 decimal places as needed)
Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 32Deposits 205Loans 150 Securities 53Other $X Using the balance sheet above, find the level of required reserves for this bank if the required reserve ratio = 8%(Give answers to 2 decimal places as needed)
13. Refer to Table 1. First Commercial bank’s excess reserves equal $__________.a) 150,000b) 250,000c) 100,000d) 50,00014. Refer to Table 1. First Commercial Bank’s total loans equal $______________.a) 1,050,000b) 1,180,000c) 1,150,000d) 1,250,000
The following net transaction accounts and cash reserves at the Federal Reserve have been documented by a bank for computation of its reserve requirements (in millions) under lagged reserve accounting. November Monday Tuesday Wednesday Thursday 5th Friday 6th 2nd 3rd 4th $220 $9 Tuesday 10th $250 $12 Tuesday 17th $220 $7 Friday 13th $280 $6 Fridzy 20th Net Transaction Accounts $230 $200 $11 Wednesday 11th $250 $9 Wednesday 1sth $190 Reserves at Fed S10 Monday 9th $170 S8 Thursday 12th $220 Net Transaction Accounts Reserves at Fed $5 Thursday Mondzy 16 $210 19th Net Transaction Accounts $310 $7 Tuesday 24th $340 $6 Wednesday $180 $160 $6 Friday 27th Reserves at Fed $5 Monday 23th Thursday 26th 25th Net Transaction Accounts $270 $8 Tuesday Ist $350 $12 Tuesday $150 $4 Wednesday 2nd $250 $1 Wednesday $250 $9 $250 S5 $280 $7 Reserves at Fed December Monday 30th $340 Thursday 3rd $240 Friday 4th $220 $9 Friday 1lth Net Transaction Accounts Reserves at Fed $1 $10 Monday Thursday 10th 7th Sth…
The table below reports the breakdown of assets and liabilities for all commercial banks for January 2020, two months before the start of the COVID-19 recession, and December 2020. Assets (in billions of dollars) Liabilities (in billions of dollars) Jan-20 Dec-20 Jan-20 Dec-20 Loans $10,041.54 $10,376.47 Deposits $13,293.30 $16,061.82 Reserves $1,768.52 $3,168.94 Borrowings $1,965.90 $1,715.81 Treasury Securities $3,008.19 $3,726.10 Other Liabilities $593.42 $825.74 Other Assets $2,984.52 $3,224.45 Total Assets $17,802.77 $20,495.96 Total Liabilties $17,802.77 $20,495.96 From January to December, the net worth of banks changed by $___ billion (round your answer to two decimal places).
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9. How would you incorporate security considerations/costs into the transactions demand model? What would this imply for the demand for currency in a relatively insecure urban environment (a) compared with a relatively safe one, (b) when owner-identiﬁed smart cards become available? Do these factors affect the demand for demand deposits? How would the proportion of currency to demand deposits be affected in these cases? 10. Can the transactions demand model be used to explain why ﬁnancial innovations in recent decades have reduced the transactions demand for M1? 11. Are transactions demand models useless, as Sprenkle (1969) argued? If they are, how would you explain the demand for M1 or just for demand deposits in the economy?
1. Suppose that a bank’s customer deposits $20,000 in her checking account. The required reserve ratio is 0.125. What are the required reserves on the new deposit? What is the largest loan that the bank can make on the basis of the new deposit? What is the maximum the banking system can increase demand deposits as a result of this deposit? -------------
B3-4 ALL QUESTIONS GO WITH GRAPH 1. What would be the level of excess reserves if the required reserve ratio were 20%? a) There would be a shortfall in required reserves of $100,000 b) 0 c) $300,000 d) $900,000 e) $1,000,000 2. If the reserve required ratio is 10%, how much can this bank lend? a) $900,000 b) $1,000,000 c) $1,300,000 d) $500,000 e) $400,000 3. Assume: a required reserve ratio of 10%, this bank is the only one with excess reserves, banks do not wish to hold excess reserves and the public does not wish to increase its cash holdings. What is the maximum amount of new money the banking system can create? a) $900,000 b) $500,000 c) $400,000 d) $4,000,000 e) $5,000,000
Bank A:Reserves on hand $38,000Deposit in the Fed $30,000US government bonds $12,000Checking account balances $120,000Savings account balances $25,000Bank B:Reserves on hand $50,000US government bonds $7500Savings account balances $20,000Checking account balances $100,000 In addition, people in this economy hold $8800 in cash, and all banks have the same reserve requirements we've used all semester. Calculate the amount of cash in Bank A, carefully following all numeric instructions.
Bank A:Reserves on hand $38,000Deposit in the Fed $30,000US government bonds $12,000Checking account balances $120,000Savings account balances $25,000Bank B:Reserves on hand $50,000US government bonds $7500Savings account balances $20,000Checking account balances $100,000 In addition, people in this economy hold $8800 in cash, and all banks have the same reserve requirements we've used all semester. Calculate this economy's monetary base, carefully following all numeric instructions.