(a) Explain THREE (3) reasons what gives
money value even though they are token money.
(b) The following balance sheet is for a commercial
bank. Assume the required reserve ratio is 4 percent.
Assets Liabilities and Net Worth
Reserves $100,00 Checkable
Deposits $300,000
Loans 140,000 Stock shares
200,000
Securities 60,000
Property 200,000
(i) Calculate the required
reserves.
(ii) Calculate the maximum amount that the money supply
can be expanded.
(iii) If the reserve ratio rises...