Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system. All figures are in billions. The reserve ratio is 25 percent. A. What amount of excess reserves does the commercial banking system have? What is the maximum amount the banking system might lead? Show in column 1 how the conslidated balance sheet would look after this amount has been lent. what is the multiplier?
assuming the reserve ratio is 20 percent. Explain the resulting difference in the lending ability of the commercial banking system
Assets (I) Reserves $52, Securities $48 Loans $100 Liabilities and net worth (I) Checkable deposits $200