Table 1 shows the financial position of the Smithville Bank once $4025.00 has been deposited. Assume that the required reserve ratio is 8.00%. The bank manager decides to lend Billy Bob Smith all of the bank's excess reserves. Billy Bob takes the funds to Eula Mae's Used Machines and buys a pickup truck. Eula Mae then deposits the money in her account back at the Smithville Bank. Table 2 should show the bank's accounts after the loan is made and the funds again deposited. Round all answers to the nearest cent. Table 1. Original Assets and Liabilities Assets reserves: $4025.00 Assets Liabilities Table 2. Assets and Liabilities After Bank Makes a Loan reserves: ? deposits: $4025.00 Liabilities deposits: ?
Table 1 shows the financial position of the Smithville Bank once $4025.00 has been deposited. Assume that the required reserve ratio is 8.00%. The bank manager decides to lend Billy Bob Smith all of the bank's excess reserves. Billy Bob takes the funds to Eula Mae's Used Machines and buys a pickup truck. Eula Mae then deposits the money in her account back at the Smithville Bank. Table 2 should show the bank's accounts after the loan is made and the funds again deposited. Round all answers to the nearest cent. Table 1. Original Assets and Liabilities Assets reserves: $4025.00 Assets Liabilities Table 2. Assets and Liabilities After Bank Makes a Loan reserves: ? deposits: $4025.00 Liabilities deposits: ?
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Monetary System
Section: Chapter Questions
Problem 4PA
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