By how much would the economys money supply increase

Reference no: EM13198536

Suppose that the T-account for First National Bank is as follows:

Assets Liabilities

Reserves $100,000 Deposits $500,000

Loans 400,000

a. If the Fed requires banks to hold 5 percent of deposits as reserves, how much in excess of reserves does First National now hold?
b. Assume that all other banks only the required amount, by how much would the economy's money supply increase?

Reference no: EM13198536

Questions Cloud

Abbey in the oak forest : What are some similarities and differences between Kandinsky's "Improvisation 28" and Friedrich's "Abbey in the oak forest"?

What is the mean of the sampling distribution : What is the mean of the sampling distribution of p ˆ, the proportion of adults in samples of 500 who favor giving parents of school-age children these vouchers?

In the berkeley longitudinal studies : In the Berkeley Longitudinal Studies, which of the following characteristics was generally STABLE across time for the adult?

Find the value of x that minimizes the total area : A wire L = 16 cm long is cut into two pieces, one of length x and the other of length (L - x), Each piece is bent into the shape of a square.

By how much would the economys money supply increase : a. If the Fed requires banks to hold 5 percent of deposits as reserves, how much in excess of reserves does First National now hold b. Assume that all other banks only the required amount, by how much would the economy's money supply increase

Define abnormal and twisted personalities : David suggested that the atrocities were committed because the Germans had become unusually cruel, sadistic people with abnormal and twisted personalities

Find the dimensions of the tennis court : The distance around a tennis court is 378 feet. If the length of the court is 3 feet more than twice the width, find the dimensions of the tennis court.

Different personal and societal impacts of slut-bashing : What, according to Tanenbaum in the book "Slut!", are the different personal and societal impacts of slut-bashing?

What money supply should the fed set next year : Suppose that velocity is constant and the economy's output of goods and services rises by 5 percent each year. What will happen to nominal GDP and the price level next year if the Fed keeps the money supply constant.

User Account

All Pages