wk4a2 changes monetary policy

When you have no idea what to do with your written assignments, use a reliable paper writing service. Now you don’t need to worry about the deadlines, grades, or absence of ideas. Place an order on our site to get original papers for a low price.

Order a Similar Paper Order a Different Paper

Prepare a 2-3 page analysis by answering the questions below. Be sure to cite your references using APA format.


Assume that the Bank of Ecoville has the following balance sheet and the Fed has a 10% reserve requirement in place:


                                                         Balance Sheet for Ecoville International Bank

                                      Assets                                                               Liabilities

                     Cash                  $33,000                                          Demand Deposits           $99,000

                     Loans                $66,000




Now assume that the Fed lowers the reserve requirement to 8%.


1. What is the maximum amount of new loans that this bank can make?


2. Assume that the bank makes these loans. What will the new balance sheet look like?


3. By how much has the money supply increased or decreased?


4. If the money multiplier is 5, how much money will ultimately be created by this event?


5.  If the Fed wanted to implement a contractionary monetary policy using reserve requirement, how would that work?



Address the questions above, showing your calculations. Develop your analysis in Microsoft Excel format. Enter non-numerical responses in the same worksheet using textboxes.


Get help with your complex tasks from our writing experts. Kindly click on ORDER NOW to receive an A++ paper from our masters- and PhD writers.

Get a 15% discount on your order using the following coupon code SAVE15

Order a Similar Paper Order a Different Paper