ZuoTi.Pro
Question

10. Considering a recession may happen next year. Commercial banks are more conservative in their lending policies and start7. Refer to the table below. The required reserve ratio is 25%. If the First Charter Bank is meeting its reserve requirement6. First National Bank has assets of $500,000 and liabilities of $400,000. First National Banks equality (net capital) is A.

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

10.

D

When banks start holding excess reserve, then less loan and lesser deposit creation will take place. As a result, money supply will be lower.

---------------

7.

B

Working note:

Loans = 1200 - required reserve = 1200 - 25%*800

Loans = $1000

------------------

8.

A

Working note:

Required reserve ratio = (400000 - 100000)/2000000

Required reserve ratio = 15%

------------------

6.

C

Working note:

Net capital = Assets - liability = 500000 - 400000

Net Capital = $100000

0 0
Add a comment
Know the answer?
Add Answer to:
10. Considering a recession may happen next year. Commercial banks are more conservative in their lending...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 10. Considering a recession may happen next year. Commercial banks are more conservative in their lending...

    10. Considering a recession may happen next year. Commercial banks are more conservative in their lending policies and start holding some excess reserves. Compared to a situation in which banks are not holding excess reserves, the size of the money supply will be A. depending on fiscal policy B. larger C. the same. D. smaller 1. Suppose a bank has a 5 percent reserve ratio, $10,000 in deposits, and it loans out all it can, given the reserve ratio. Which...

  • DJ. It has $559 in reserves and $9445 in loans. ? 2. The ability of banks...

    DJ. It has $559 in reserves and $9445 in loans. ? 2. The ability of banks to create money has its source in which of the following A. the 100 percent reserve requirement B. fractional-reserve banking (i.e. less than 100 percent reserve requirement) C. the ability of the government to mint as much currency as it wishes D. the banks' ability to issue currency (bank notes) of their own ? 3. Which of the following items is a liability to...

  • ECON2313 hw4 2019b DADE. Layout References Mailings Review View X AA EEEE A. A. a ABCDE...

    ECON2313 hw4 2019b DADE. Layout References Mailings Review View X AA EEEE A. A. a ABCDE Date was cold лавьсаган Аавьссос Аавьсса. Аавbe d Aabbe Heading 7. Refer to the table below. The required reserve ratio is 25%. If the First Charter Bank is meeting its reserve requirement and has no excess reserves, its loans equal First Charter Bank Assets Llabilities Reserves SSD Deposits Loans 4400 Net Worth Total $1.200 Total A. $900. B. $1,000 C. $600. D. $1,800 8....

  • QUESTION 15 First Charter Bank Liabilities $2,000,000 Deposits $200,000 $1,800,000 $2,000,000 Assets Reserves Loans Total $2,000,000...

    QUESTION 15 First Charter Bank Liabilities $2,000,000 Deposits $200,000 $1,800,000 $2,000,000 Assets Reserves Loans Total $2,000,000 Total Table 13.4 Refer to Table 13.4. If First Charter Bank earns a loss of $100,000, then: O owner's equity will decrease by $100,000. O deposits will decrease by $100,000. o owner's Equity will increase by $100,000. O deposits will increase by $100,000. QUESTION 16 $60,000 $40,000 People's Bank Assets Liabilities Total Reserves: $500,000 Deposits Required Owners' Equity Excess Loans Total $700,000 Total $700,000...

  • 1. Suppose a bank has a 5 percent reserve ratio, $10,000 in deposits, and it loans...

    1. Suppose a bank has a 5 percent reserve ratio, $10,000 in deposits, and it loans out all it can, given the reserve ratio. Which of the following is correct_ _? A. It has $50 in reserves and S9950 in loans. B. It has $500 in reserves and $9500 in loans. C. It has $555 in reserves and S9445 in loans. D. It has S559 in reserves and S9445 in loans. 10. Considering a recession may happen next year. Commercial...

  • The table shows the balance sheet of a banking system (aggregated over all the banks). The...

    The table shows the balance sheet of a banking system (aggregated over all the banks). The desired reserve ratio on all deposits is 1 percent. There is no currency drain. Calculate the bank's excess reserves. Assets Liabilities (millions of dollars) Reserves at the Fed 20 Checkable deposits Cash in vault Savings deposits Securities Loans 100 75 >>> Answer to 2 decimal places. The banking system's excess reserves are $ million

  • 1) Bank 1 has deposits of $4141 and reserves of $455. If the required reserve ratio...

    1) Bank 1 has deposits of $4141 and reserves of $455. If the required reserve ratio is 10%, what is the value of the bank's excess reserves? Enter a whole number with no dollar sign. Round to the nearest whole number. 2) In a fractional reserve banking system a. banks hold a fraction of deposits as reserves. b. the reserve ratio measures the percentage of deposits available to be lent out. c. banks hold a fraction of reserves as deposits....

  • QUESTION 1 0.8 points Saved Assets Liabilities Reserves $100 Loans T-Bills Deposits S1,000 800 100 Refer...

    QUESTION 1 0.8 points Saved Assets Liabilities Reserves $100 Loans T-Bills Deposits S1,000 800 100 Refer to this scenario for all of the questions on this problem set Suppose the balance sheet shown is for the only bank in the banking system. The reserve requirement is 10%. If the Fed buys $50 worth of T-bills from this bank, immediately after that exchange, before the bank expands its lending in response, the bank's reserves would equal 150 QUESTION 2 0.8 points...

  • The Bank of Your Class has the following balance sheet.       &nbs...

    The Bank of Your Class has the following balance sheet.                      Assets                                                        Liabilities ____________________________________________________________________ Cash (reserves)                $4,000                                Deposits $100,000 Deposited at the Fed       $5,000 Loans                                 $91,000 ______________________________________________________________________ Total                                   $100,000                                      $100,000 The required reserve ratio on all deposits is 5% a. What, if any, are the bank's excess reserves? b. How much new amount of loan will this bank be able to create? c. How much new amount of loan will the entire banking system (all bank) be able to create? d....

  • 1. The manager of the bank where you work tells you that your bank has $10.9...

    1. The manager of the bank where you work tells you that your bank has $10.9 million in excess reserves. She also tells you that the bank has $203 million in deposits and $164 million in loans. Given this information you find that the reserve requirement must be what percent? Enter a number rounded to one decimal place. You may assume that the bank does not hold any other assets or liabilities besides reserves, loans, and deposits. 2. Suppose we...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT