Assets___________ Liabilities______
Cash 80,000 DD 2,000,000 XR = 20,000
Dep at Fed 120,000
Treasury Bills 80,000
1. This bank has RR in the amount of _____ dollars.
2. The rr for this bank is equal to _____.
3. This bank can safely expand its loan portfolio by _______ dollars.
4. Suppose all other banks in the system are “fully loaned up” and they face the same reserve ratio. The maximum potential increase in the money supply is._____
5. If the Fed were to change the rr to 10% for this bank then
a. this bank would have a deficiency in its reserves.
b. could expand its loan portfolio by an additional 100,000.
c. would need to sell some of its T-bills to raise reserves.
d. could expand its loan portfolio by 120,000.
e. none of the above are correct