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Alpha Bank's Balance Sheet Is Shown in the Following Table

Question 135

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Alpha Bank's balance sheet is shown in the following table Alpha Bank's balance sheet is shown in the following table If the bank is fully loaned-up, what is its required reserve ratio? Suppose a depositor adds $5,000 to her account with Alpha Bank. Alpha Bank uses the additional deposit to make a loan and the funds are deposited in Beta Bank, which then makes loans so as to be fully loaned-up. What does Beta Bank's balance sheet look like after the new borrowers spend the money they were loaned? If the bank is fully loaned-up, what is its required reserve ratio? Suppose a depositor adds $5,000 to her account with Alpha Bank. Alpha Bank uses the additional deposit to make a loan and the funds are deposited in Beta Bank, which then makes loans so as to be fully loaned-up. What does Beta Bank's balance sheet look like after the new borrowers spend the money they were loaned?

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