Describe the balance sheet for one of the given banks

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Reference no: EM132197907

Question: In the country of SpringNow, the public is holding a total of $5,000. Total lending in the banking sector, which has 10 identical banks, is $76,000. The currency deposit ratio is 5% and the reserve requirement is 15%. The banks may hold excess reserves.

(a) Describe the balance sheet for one of the 10 banks.

(b) How much reserves do the banks hold as a fraction of total deposits?

(d) What is the money multiplier in this economy?

(e) How would a $8,000 open market sale of bonds by Spring Now central bank change total reserves and money supply in SpringNow? Assume that all the banks behave identically.

Reference no: EM132197907

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