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Macroeconomics 19th Edition by Campbell McConnell , Stanley Brue,Sean Flynn
Edition 19ISBN: 978-0077337728Macroeconomics 19th Edition by Campbell McConnell , Stanley Brue,Sean Flynn
Edition 19ISBN: 978-0077337728 Exercise 5
The balance sheet at the top of the next page is for Big Bucks Bank. The reserve ratio iS20 percent.
a. What is the maximum amount of new loans that Big Bucks Bank can make? Show in columnS1 and 1? how the bank's balance sheet will appear after the bank has lent this additional amount.
b. By how much has the supply of money changed?
c. How will the bank's balance sheet appear after checks drawn for the entire amount of the new loans have been cleared against the bank? Show the new balance sheet in columnS2 and 2?.
d. Answer questions a, b, and c on the assumption that the reserve ratio iS15 percent.
a. What is the maximum amount of new loans that Big Bucks Bank can make? Show in columnS1 and 1? how the bank's balance sheet will appear after the bank has lent this additional amount.
b. By how much has the supply of money changed?
c. How will the bank's balance sheet appear after checks drawn for the entire amount of the new loans have been cleared against the bank? Show the new balance sheet in columnS2 and 2?.
d. Answer questions a, b, and c on the assumption that the reserve ratio iS15 percent.
Explanation
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a. The balance sheet is reproduced below...
Macroeconomics 19th Edition by Campbell McConnell , Stanley Brue,Sean Flynn
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