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Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue
Edition 18ISBN: 9780077354237Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue
Edition 18ISBN: 9780077354237 Exercise 10
Suppose that Continental Bank has the simplified balance sheet shown below and that the reserve ratio is 20 percent:
a. What is the maximum amount of new loans that this bank can make Show in column 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 Explain.
c. How will the bank's balance sheet appear after checks drawn for the entire amount of the new loans have been cleared against this bank Show this new balance sheet in column 2.
d. Answer questions a, b, and c on the assumption that the reserve ratio is 15 percent.
a. What is the maximum amount of new loans that this bank can make Show in column 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 Explain.
c. How will the bank's balance sheet appear after checks drawn for the entire amount of the new loans have been cleared against this bank Show this new balance sheet in column 2.
d. Answer questions a, b, and c on the assumption that the reserve ratio is 15 percent.
Explanation
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Verified
a. The balance sheet is reproduced below...
Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue
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