The table below is the balance sheet for the Oilers Bank, which has a target reserve ratio of 5%. Liabilities/Equity Assets Reserves Loans Securities Fixed assets Total $3,000 Demand Deposits 34,000 8,500 4,500 50,000 a. The Oilers Bank is over-reserved Shareholders' equity Total $40,000 10,000 50,000 by $ b. The bank makes a loan equal to the excess reserves and the borrower writes a cheque (for the full amount of the loan) to another customer of the bank, who then deposits it. The new amount of excess reserves is $ c. Instead, the cheque written by the borrower is cleared against the Oilers Bank (the cheque was written to a customer of another bank). The amount of excess reserves held by the Oilers Bank is $

The table below is the balance sheet for the Oilers Bank, which has a target reserve ratio of 5%. Liabilities/Equity Assets Reserves Loans Securities Fixed assets Total $3,000 Demand Deposits 34,000 8,500 4,500 50,000 a. The Oilers Bank is over-reserved Shareholders' equity Total $40,000 10,000 50,000 by $ b. The bank makes a loan equal to the excess reserves and the borrower writes a cheque (for the full amount of the loan) to another customer of the bank, who then deposits it. The new amount of excess reserves is $ c. Instead, the cheque written by the borrower is cleared against the Oilers Bank (the cheque was written to a customer of another bank). The amount of excess reserves held by the Oilers Bank is $

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter14: Money And Banking

Section14.2: History Of Americans Money And Banking

Problem 2R

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