Could someone show me how to calculate these?
1. Answer the question, based on the following consolidated balance sheet for the commericial banking system. Assume the required reserve ratio is 12%. All figures are in billions of dollars.
Refer to the above data. What is the maximum amount by which the commercial banking system can expand the supply of money by lending?
2. A commercial bank has checkable-deposit liabilities of $500,000, reserves of $150,000, and a required reserve ratio of 20%.
(a) What is the amount by which a single commercial bank can increase loans?
(b) What is the amount by which the banking system can increase loans?
3. Assume that the reserve ratio is 20% and banks in the system are loaning out all their excess reserve. If people collectively cash out $10 billion from their checking accounts, what then will be the lending liability of the banking system (increased or decreased, and by how much)?
1. Answer the question, based on the following consolidated balance sheet for the commericial banking system. Assume the required reserve ratio is 12%. All figures are in billions of dollars.
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Refer to the above data. What is the maximum amount by which the commercial banking system can expand the supply of money by lending?
2. A commercial bank has checkable-deposit liabilities of $500,000, reserves of $150,000, and a required reserve ratio of 20%.
(a) What is the amount by which a single commercial bank can increase loans?
(b) What is the amount by which the banking system can increase loans?
3. Assume that the reserve ratio is 20% and banks in the system are loaning out all their excess reserve. If people collectively cash out $10 billion from their checking accounts, what then will be the lending liability of the banking system (increased or decreased, and by how much)?
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