Explain assets liabilities vault cash checking deposit

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Suppose that the reserve requirement is 10 percent and the balance sheet of the People's National Bank looks like the accompanying example. a. Indicate how the bank's balance sheet would be altered if it extended this loan (show the new t-account). b. Suppose that the required reserves were 20 percent. If this were the case, would the bank be in a position to extend any additional loans? Explain Assets Liabilities Vault Cash $20,000 Checking deposits $200,000 Deposits at Fed $30,000 Net Worth $15,000 Securities $45,000 Loans $120,000

Reference no: EM13148223

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