The following table shows the balance sheet for all banks combined in the banking system.All banks have a target reserve ratio of 12.5 percent.
a)What is the amount of excess reserves.
b)What is the maximum amount that loans and deposits can be increased?
c)If the banking system were fully loaned up,by how much will the money supply have increased?

Question

The following table shows the balance sheet for all banks combined in the banking system.All banks have a target reserve ratio of 12.5 percent.
  a)What is the amount of excess reserves.
b)What is the maximum amount that loans and deposits can be increased?
c)If the banking system were fully loaned up,by how much will the money supply have increased?

Quizplus · Accepted Answer

The Answer of The following table shows the balance sheet for all banks combined in the banking system.All banks have a target reserve ratio of 12.5 percent.
  a)What is the amount of excess reserves.
b)What is the maximum amount that loans and deposits can be increased?
c)If the banking system were fully loaned up,by how much will the money supply have increased?

The Following Table Shows the Balance Sheet for All Banks