suppose the reserve requirement is 10 percent and the balance sheet of the peopl
ID: 1239302 • Letter: S
Question
suppose the reserve requirement is 10 percent and the balance sheet of the peoples national bank looks like the accompanying example.ASSETS
vault cash - $20,000
deposits at fed - 30,000
securities - 45,000
loans - 120,000
LIABILITIES
checking deposits - $200,000
net worth - 15,000
answer the following:
C. indicate how the banks balance sheet would be altered if it extended this loan.
D. suppose that the required reserves were 20 percent. if this were the case, would the bank be in a position to extend any additional loans? explain
Explanation / Answer
liabilities will increase by 120,00 D. NO ,
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