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Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system...

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Accounting

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Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system and that all figures are in billions of dollars. The reserve ratio is 10 percent. Instructions: Refer to the balance sheet below. Enter your answers as whole numbers. a. What is the amount of excess reserves in this commercial banking system? billion What is the maximum amount the banking system might lend? billion Show in columns 1(a) and 1(a) how the consolidated balance sheet would look after this amount has been lent. What is the size of the monetary multiplier? b. Using the original figures, answer the questions in part a assuming the reserve ratio is 5 percent. What is the amount of excess reserves in this commercial banking system? billion

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