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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 13
Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system. All figures are in billions. The reserve ratio is 25 percent.
a. What amount of excess reserves does the commercial banking system have What is the maximum amount the banking system might lend Show in column 1 how the consolidated balance sheet would look after this amount has been lent. What is the monetary multiplier
b. Answer the questions in part a assuming that the reserve ratio is 20 percent. Explain the resulting difference in the lending ability of the commercial banking system.
a. What amount of excess reserves does the commercial banking system have What is the maximum amount the banking system might lend Show in column 1 how the consolidated balance sheet would look after this amount has been lent. What is the monetary multiplier
b. Answer the questions in part a assuming that the reserve ratio is 20 percent. Explain the resulting difference in the lending ability of the commercial banking system.
Explanation
Verified
Verified
$260 billion. Monetary multiplier = 5 ...
Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue
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