Construct the balance sheet of the the total banking system, Microeconomics

Assignment Help:

Suppose a banking system with the following balance sheet has no excess reserves. Assume that banks will make loans in the full amount of any excess reserves that they acquire and will immediately be able to eliminate loans from their portfolio to cover inadequate reserves

         Assets                                                          l                                        Liabilities

(In Millions)                                                         l                                     (In Millions)

Total Reserves              $30                                l           Transactions Accounts                                         $300

Securities                      $ 90                                l

______                          l

Loans                            _180__                         l

       Total                  _______                            l            Total                                                                     $300

 

(a) What is the reserve requirement?

(b) Suppose the reserve requirement is changed to 5 percent. Reconstruct the balance sheet of the the total banking system after all banks have fully utilized their lending capacity.


Related Discussions:- Construct the balance sheet of the the total banking system

Critique of economic reforms, CRITIQUE OF ECONOMIC REFORMS: The critiq...

CRITIQUE OF ECONOMIC REFORMS: The critique of economic reforms should consider the actual growth rate achieved, its impact on employment and poverty reduction, its impact on l

Draw demand curve, Suppose that the following equation characterizes the de...

Suppose that the following equation characterizes the demand for primary education in a developing country X: Q = 100 – 2P Where Q is quantity demanded in years of schooling and

Measuring economies of scale in long run, Economies and Diseconomies of Sca...

Economies and Diseconomies of Scale -Economies of Scale Increase in the output is greater than increase in the inputs. -Diseconomies of Scale Increase in the

Coase theorem, Discuss the possible solutions for private solutions (Coase ...

Discuss the possible solutions for private solutions (Coase Theorem) Question 8: Demand: P=100-Q Supply: P=Q MEB= 10 Discuss the possibility of over or under allocations of reso

Production Posibilities Curve, Define the Production Possibilities Curve an...

Define the Production Possibilities Curve and explain the basic economics concepts using the PPC. Explain the factors tht shift the PPC outwards

Utitility, In November 2010, every Mzumbe University student had an income ...

In November 2010, every Mzumbe University student had an income of 150000/= per month,facing the price of meal (X) 1000/= and average price of other goods (Y) 1000/=.The initial ut

Marginal revenue, Marginal Revenue, Marginal Cost & Profit Maximization ...

Marginal Revenue, Marginal Cost & Profit Maximization * Determining profit maximizing level of output - Profit (π ) = Total Revenue - Total Cost - Total Revenue (R) = Pq

Boltzmann distribution, Boltzmann Distribution: In most cases of interest o...

Boltzmann Distribution: In most cases of interest of chemistry the particles adopt the Boltzmann distribution. Qualitative considerations: the general expression for W given by eq

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd