Let's assume that Jon has $1,000 in currency that he has been carrying around. Jon decides this is unsafe and deposits the full $1000 into his checking account at The River Bank. By how much has total M1 in the country changed by this transaction alone?
The River Bank
(marketing slogan: "we specialize in liquidity")
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| . |
Assets |
Liabilities and Capital |
|
| . |
Deposits at The Fed |
$40,000 |
Checkable Deposits |
$500,000 |
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| . |
Cash on Hand (Vault cash) |
$10,000 |
Securities Sold/Issued |
$10,000 |
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| . |
Securities Owned |
$150,000 |
Net Capital |
$10,000 |
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| . |
Loans |
$300,000 |
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| . |
Other Long-term Assets |
$20,000 |
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| . |
Total Reserves On Hand: |
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Required Reserves: |
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Excess Reserves:
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