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book The Economics of Money, Banking, and Financial Markets 10th Edition by Frederic Mishkin cover

The Economics of Money, Banking, and Financial Markets 10th Edition by Frederic Mishkin

Edition 10ISBN: 978-0132763646
book The Economics of Money, Banking, and Financial Markets 10th Edition by Frederic Mishkin cover

The Economics of Money, Banking, and Financial Markets 10th Edition by Frederic Mishkin

Edition 10ISBN: 978-0132763646
Exercise 4
Unless otherwise noted, the following assumptions are made in all questions: The required reserve ratio on checkable deposits is 10%, banks do not hold any excess reserves, and the public's holdings of currency do not change.
Classify each of these transactions as an asset, a liability, or neither for each of the "players" in the money supply process-the Federal Reserve, banks, and depositors.
a. You get a $10,000 loan from the bank to buy an automobile.
b. You deposit $400 into your checking account at the local bank.
c. The Fed provides an emergency loan to a bank for $1,000,000.
d. A bank borrows $500,000 in overnight loans from another bank.
e. You use your debit card to purchase a meal at a restaurant for $100.
Explanation
Verified
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a. Getting a $10,000 loan from the bank ...

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The Economics of Money, Banking, and Financial Markets 10th Edition by Frederic Mishkin
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