The balance sheet below shows the effect of a new 2,800 deposit in Bank A. Assume that the commercial banks have established a 16 percent desired...
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The balance sheet below shows the effect of a new 2,800 deposit in Bank A. Assume that the commercial banks have established a 16 percent desired reserve and that no bank holds excess reserves. BAN K An s LiabilitiesReserves 2,800 Deposits 2,800 Loans 0 Assume that Bank A lends its excess reserves to Mr. Jones who spends the proceeds of the loan. Show Bank A's new balance sheet BANK AAssets LiabilitiesReserves I Number I Deposits Number Loans I Number I The money Mr. Jones borrows is deposited in Bank B. Bank B lends its excess reserves to Mr. Smith. Show Bank B's balance sheet atter the loan has been made out.BANK B A Liabilities Reserves Number I Deposits NumberLoansI Number The money Mr. Smith borrows is deposited in Bank C. Bank 0 lends its excess reserves to Mr. Black. Show Bank C‘s balance sheet alter the loan has been made out. The money Mr. Smith borrows is deposited in Bank C. Bank C lends its excess reserves to Mr. Black. Show Bank C's balance sheet after the loan has been made out. BANK C Assets Liabilities Reserves Number Deposits Number Loans I Number I
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