ASSETS
LIABILITIES + NET WORTH
Reserves $ 200 Checkable Deposits $
600
Loans 100 Stock Shares 700
Securities 500
Property 500
Refer to the above information for a
single bank. The required (legal) reserve ratio is 25%.
This bank can safely expand its loans by a maximum of:
1. $0
2. $50
3. $100
4. $200
Refer to the above information. The
required (legal) reserve ratio is 25%. If the original bank
balance sheet was for the commercial banking system, rather
than a single bank, loans and deposits could have been
expanded by a maximum of:
1. $0
2. $50
3. $100
4. $200
What is your answer to the question
above if the Fed lowered the Required Reserve ratio to
20%?
1. $200
2. $250
3. $400
4. $600
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