Banking Question 2 Please use the balance sheet for Bank Alpha to answer the questions. Assume Bank Alpha loans all of its excess reserves, and the assets and liabilities balance on the balance sheet. Show all work. Bank Alpha a. Required Reserves C. Loans Assets X $27,000.00 Liabilities Checking Deposits Saving Deposits $5,000.00 How much is X, the dollar amount of reserves? b. How much is the required reserve ratio? How much is the M? Assume Bank Alpha loans its excess reserves to Bank Beta. Next Bank Beta loans their excess reserves to Bank Gamma. Please create balance sheets for Banks Beta and Gamma. Assume there are no excess reserves in this banking system. d. How much total money stock created in this banking system? e. What is the total of M1 for Bank Alpha? M2? $25,000.00

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter27: Money And Banking
Section: Chapter Questions
Problem 31P: Humongous Bank is the only bank in the economy. The people in this economy have 20 million in money,...
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Banking Question 2
Please use the balance sheet for Bank Alpha to answer the questions. Assume Bank Alpha loans all of its
excess reserves, and the assets and liabilities balance on the balance sheet. Show all work.
Bank Alpha
a.
Required Reserves
C.
Loans
e.
Assets
X
$27,000.00
How much is X, the dollar amount of reserves?
b. How much is the required reserve ratio? How much is the M?
m
Checking Deposits
Saving Deposits
Liabilities
$5,000.00
Assume Bank Alpha loans its excess reserves to Bank Beta. Next Bank Beta loans their excess reserves
to Bank Gamma. Please create balance sheets for Banks Beta and Gamma. Assume there are no excess
reserves in this banking system.
d. How much total money stock created in this banking system?
What is the total of M1 for Bank Alpha? M2?
$25,000.00
Transcribed Image Text:Banking Question 2 Please use the balance sheet for Bank Alpha to answer the questions. Assume Bank Alpha loans all of its excess reserves, and the assets and liabilities balance on the balance sheet. Show all work. Bank Alpha a. Required Reserves C. Loans e. Assets X $27,000.00 How much is X, the dollar amount of reserves? b. How much is the required reserve ratio? How much is the M? m Checking Deposits Saving Deposits Liabilities $5,000.00 Assume Bank Alpha loans its excess reserves to Bank Beta. Next Bank Beta loans their excess reserves to Bank Gamma. Please create balance sheets for Banks Beta and Gamma. Assume there are no excess reserves in this banking system. d. How much total money stock created in this banking system? What is the total of M1 for Bank Alpha? M2? $25,000.00
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