Table 29-6
$$\begin{array}{l}
\text { Metropolis National Bank }\
\begin{array} { l l | l l }
& \text { Assets } & { \text { Liabilities } } \
\hline \text { Reserves } & \$ 60,000 & \text { Deposits } & \$ 500,000 \
\text { Loans } & 440,000 & &
\end{array}
\end{array}$$
-Refer to Table 29-6. Metropolis National Bank is holding 2% of its deposits as excess reserves. Assume that no banks in the economy want to maintain holdings of excess reserves and that people only hold deposits and no currency. The Fed makes open market purchases of $10,000. The person who sold bonds to the Fed deposits all the funds in Metropolis National Bank. If the bank now loans out all its excess reserves, by how much will the money supply increase?
A)$190,000
B)$200,000
C)$240,000
D)$220,000

Question

Table 29-6
 $$\begin{array}{l}
\text { Metropolis National Bank }\
\begin{array} { l l | l l } 
& \text { Assets } & { \text { Liabilities } } \
\hline \text { Reserves } & \$ 60,000 & \text { Deposits } & \$ 500,000 \
\text { Loans } & 440,000 & &
\end{array}
\end{array}$$ ​
-Refer to Table 29-6. Metropolis National Bank is holding 2% of its deposits as excess reserves. Assume that no banks in the economy want to maintain holdings of excess reserves and that people only hold deposits and no currency. The Fed makes open market purchases of $10,000. The person who sold bonds to the Fed deposits all the funds in Metropolis National Bank. If the bank now loans out all its excess reserves, by how much will the money supply increase?
A)$190,000
B)$200,000
C)$240,000
D)$220,000

Quizplus · Accepted Answer

The Answer of Table 29-6
 $$\begin{array}{l}
\text { Metropolis National Bank }\
\begin{array} { l l | l l } 
& \text { Assets } & { \text { Liabilities } } \
\hline \text { Reserves } & \$ 60,000 & \text { Deposits } & \$ 500,000 \
\text { Loans } & 440,000 & &
\end{array}
\end{array}$$ ​
-Refer to Table 29-6. Metropolis National Bank is holding 2% of its deposits as excess reserves. Assume that no banks in the economy want to maintain holdings of excess reserves and that people only hold deposits and no currency. The Fed makes open market purchases of $10,000. The person who sold bonds to the Fed deposits all the funds in Metropolis National Bank. If the bank now loans out all its excess reserves, by how much will the money supply increase?
A)$190,000
B)$200,000
C)$240,000
D)$220,000

Table 29-6 ​ -Refer to Table 29-6

Table 29-6
-Refer to Table 29-6