Instead of a discussion board, this week you will submit an individual written assignment that illustrates the role commercial banks play in the creation of money. Assume that, initially, the central bank of an economy puts $5,000 into circulation and commercial banks want to hold reserves of 20 percent of deposits. Further assume that the public holds no currency. Show and discuss the consolidated balance sheets of the economy’s commercial banks for each of the following instances.

  1. After initial deposits (compare to Table 9.2 in your textbook)
  2. After one round of loans (compare to Table 9.3 in your textbook)
  3. After the first redeposit of dollars (compare to Table 9.4 in your textbook)
  4. After two rounds of loans and redeposits (compare to Table 9.5 in your textbook)
  5. What are the final values of bank reserves, loans, deposits, and the money supply (compare to Table 9.6 in your textbook)?

Response Parameters

  • typed, double spaced, and use 12-point font, thesis, conclusion
Do you need a similar assignment done for you from scratch? We have qualified writers to help you. We assure you an A+ quality paper that is free from plagiarism. Order now for an Amazing Discount!
Use Discount Code "Newclient" for a 15% Discount!

NB: We do not resell papers. Upon ordering, we do an original paper exclusively for you.