Answer to Question #63359 in Macroeconomics for Sana Jess

Question

The commercial banks in St. Paul have:

Reserves
$125 million
Loans
$1,875 million
Deposits
2,000 million
Total Assets
$2,100 million

a. Construct the commercial bank’s balance sheet. If you are missing any assets, call them “other assets”; if you are missing any liabilities, call them other liabilities”.
b. Calculate the banks’ reserve ratio.
c. If banks hold no excess reserves, calculate the deposit multiplier.