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The answers are... 20. A 21. C 22. D 23. B But how did they get the answers? I want to know the steps taken for each answer, please. Thanks!

Consolidated Balance Sheet: Commercial Banking System Liabilities & Net Worth Assets $72 Checkable Deposits 110 Loans From Federal Reserve Banks 2 60 $240 Reserves Securities Loans Consolidated Balance Sheet: Federal Reserve Banks Assets Llabliltles & Net Worth Securities Loans to Commercial Banks Reserves of Commercial Banks$72 30 140 $240 2 Treasury Deposits Federal Reserve Notes 20. Refer to the above balance sheets. If the reserve ratio is 25%, commercial bank ave excess reserves O A. $12. B. $22. C. $16. D.$24 21 efer to the above balance sheets. If the reserve ratio is 25%, the maximum oney-creating potential of the commercial banking system is: A, $36. B.$17. C.$48. D.$24 22. Referto the above balance sheets and assume the reserve ratio is 25% Suppose the Federal Reserve Banks buy $2 in securities from the public, which deposits this amount into checking accounts. As a result of these transactions supply of mone A. be unaffected but the money-creating potential of the commercial banking system will increase by $6. B. directly decrease by $2 and the money-creating potential of the commercial banking system will be unaffected. C. directly increase by $8 and the money-creating potential of the commercial banking system will increase by $32. directly increase by $2 and the money-creating potential of the commercial banking system will increase by $6. 23. Refer to the above balance sheets and assume the reserve ratio is 25 Suppose the Federal Reserve Banks sell $2 in securities directly to the commercial banks. As a result of this transaction the supply of money A. will decrease by $2, but the money-creating potential of the commercial banking system will not be affected. B. is not directly affected, but the money-creating potential of the commercial banking system will decrease by $8. C. will directly increase by $2 and the money-creating potential of the commercial banking system will decrease by $8. D. will directly increase by $2 and the money-creating potential of the commercial banking system will increase by $8. The Federal Reserve System regulates the money supply primarily b 24

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