Reserves hell by banks at the Fed According to the data below, M2= Currency $120 billion $800 billion Checkable deposits $650 bi Savings deposits $375 billion Small-time deposits $957 billion Money market mutual funds $486 billion O $3,388 billion O $1,450 billion $920 billion O $3,268 billion
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- Humongous Bank is the only bank in the economy. The people in this economy have 20 million in money, and they deposit all their money in Humongous Bank. Humongous Bank decides on a policy of holding 100 reserves. Draw a T-account for the bank. Humongous Bank is required to hold 5 of its existing 20 million as reserves, and to loan out the rest. Draw a T-account for the bank after it has made its first round of loans. Assume that Humongous bank is part of a multibank system. How much will money supply increase with that original 19 million loan?1. You deposit $100 of currency into your account. Explain what happens to reserves , checkabledeposits, and monetary base? 2. Explain what the shadow banking system is and how it works. 3. Your bank has the following balance sheet:Assets LiabilitiesReserves $70 million Checkable deposits $200 millionSecurities $50 millionLoans $130 million Bank capital $50 millionIf the required reserve ratio is 10%, what actions should the bank manager take if there is anunexpected deposit outflow of $50 million? Explain your answer. 4. Explain and demonstrate graphically that if the central bank pursues targeting a monetaryaggregate, it is likely to lose control over the interest rate. 5. In the market for reserves, the federal funds rate is equal to the interest rate paid on excessreserves. Explain and demonstrate graphically the effect of an open market sale on the federalfunds rate.Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 32Deposits 205Loans 150 Securities 53Other $X Using the balance sheet above, find the level of required reserves for this bank if the required reserve ratio = 8%(Give answers to 2 decimal places as needed)
- Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 44Deposits 255Loans 155 Securities 51Other $X Using the balance sheet above, find the level of excess reserves this bank is holding if the required reserve ratio = 6%(Give answers to 2 decimal places as needed)Your bank has the following balance sheet: Assets Liabilities Checkable Reserves $90 million $380 million deposits $130 Securities million Loans $200 million Bank capital $40 million If the required reserve ratio is 20%, what will be the size of this bank (as measured by its total assets or liabilities) after $20 million deposit outflow if it just meets reserve deficiency by taking out a discount loan from the Federal Reserve? $402 million $400 million. OOOO $420 million. $412 million.Consider the following balance sheet of Berjaya Bank. The required reserve ratio on demand deposits is 8%. Berjaya Bank Aset / Assets (million $) Rizab / Reserves Pinjaman / Loans Sekuriti / Securities Liabiliti / Liabilities (million $) Deposit semasa Demand deposits Modal bank / Net Worth 30 290 150 140 30 1. Calculate the bank's excess reserves 2. Suppose Berjaya Bank sells $40 million of its securities to the central bank. Show the balance sheet of Berjaya Bank after this transaction
- The table gives information about items on a bank's balance sheet. Calculate the bank's deposits that are part of M1, deposits that are part of M2, and the bank's loans, securities, and Item reserves. (millions of dollars) Checkable deposits Savings deposits Small time deposits 400 The bank's deposits that are part of M1 equal $ million. 500 720 The bank's deposits that are part of M2 equal $ million. Loans to businesses 950 Government securities 600 Currency 30 Reserves at the Fed 40 Enter your answer in the edit fields and then click Check Answer. 2 parts remaining Clear All Check Answer MacBook Air DII DD 80 888 F10 F11 F12 esc F4 F5 F6 F7 F8 F9 F1 F2 F3 ! @ 23 $ % & 1 2 4 6 7 { Y U P Q W E tab S D F G H K А caps lock > + I/ * 00Table 2 First National Bank Assets Liabilities and Owners' Equity Reserves $1,200 Deposits $9,000 Loans $8,000 Debt $800 Short-term securities $800 Capital (owners' equity) $200 Refer to Table 2. The required reserve ratio is 6 percent and First National Bank sells $150 of its short-term securi to the Federal Reserve. This action will increase First National's reserves by S150. Its excess reserves are $240. decrease First National's reserves by $150. Its excess reserves are $0. increase First National's reserves by $150. Its excess reserves increase by $150. increase First National's reserves by $150. Its total reserves increase by $150. both c and d aboveNorthern Bank: Balance Sheet Assets Liabilities Reserves Loans $780 $15,220 $16,000 Deposits Capital $13,000 $3,000 $16,000 Refer to the table above. Assume that Northern Bank's target reserve ratio is 8 percent. In order to achieve its target reserve ratio, Northern Bank must and ○ A. increase its reserves by $130; decrease its deposits by $130 ○ B. increase its reserves by $260; decrease its loans by $260 ○ C. increase its reserves by $260; decrease its deposits by $260 OD. increase its reserves by $130; increase its loans by $260 ○ E. not change its reserves; not change its deposits
- Question The table below shows the components of M1 and M2 in the U.S. Use the table to calculate Total M1. Round to the nearest third decimal place. Provide your answer below: trillion Components of M1 and M2 in the U.S. Currency Traveler's checks Demand deposits and other checking accounts Savings accounts Time deposits Individual money market mutual fund balances $ trillions $1.2 $0.004 $2.204 $9.805 $0.527 $1.1762. Assets Liabilities Total Reserves 2,000,000 Transaction Deposits Required Excess Govt. Sec. 2,225,000 Loans Total Assets Total Liabilities a. Assume the required reserve rate is 20%. What are required reserves for this bank? b. What are transactions deposits and total liabilities for the bank? c. How much more money can this bank loan out at this time? Wells Fargo Bank 750,000BALANCE SHEET OF BANK A (S IN MILLIONS) ASSETS LIABILITIES and NET WORTH Reserves (Cash/Reserves at Fed) 550 Demand Deposits $100 Losns 20 Govt. Securities 90 Net Worth (Owners' Equity) What is the net worth of this bank? 2. If the required reserve is 10%, what is the amount of REQUIRED RESERVES that this bank must bold? 3. What then is the mount of EXCESS RESERVES that this bank is now holding? How much does this bank have available for NEW LOANS? 5. If the required reserve is increased to 20%, whal is the amount of REQUIRED RESERVES that this bank must bold?
