Gold Bank has $120 000 in deposits and $37 000 in liquid assets. It has a liquidity ratio is 25%.
a. What is the value of this bank's excess liquidity?
b. What is the value of the additional loans that can be made by Gold Bank?
c. What is the bank multiplier?
d. By how much will total deposits expand if this bank lends all its excess reserves and there is no leakage from the banking system?

Question

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The Answer of Gold Bank has $120 000 in deposits and $37 000 in liquid assets. It has a liquidity ratio is 25%.
a. What is the value of this bank's excess liquidity?
b. What is the value of the additional loans that can be made by Gold Bank?
c. What is the bank multiplier?
d. By how much will total deposits expand if this bank lends all its excess reserves and there is no leakage from the banking system?

Gold Bank Has $120 000 in Deposits and $37 000