Question

Does anyone know any good resources for this?

Give at least 5 similarities or differences and choose another country (other than the U.S.) and compare its central bank with the Federal Reserve.

compare its central bank with the Federal Reserve.  

(Then)

a. Imagine a bank that starts with $1,000,000 in deposits.  Assume that the reserve ratio is 10% and that the bank lends out all excess reserves.  Draw a T-account showing this scenario.

b. If all loans are redeposited in the same bank, using the same assumptions as in part a, add the effect of this to your t-account.

c.  Repeat the process in part b 3 more times.

Answer 1

THE FEDERAL RESERVE SYSTEM IS THE CENTRAL BANK OF THE UNITED STATES AND ARGUABLY THE MOST POWERFUL FINANCIAL INSTITUTION IN THE WORLD. THE FEDERAL RESERVE UNLIKE MOST CENTRAL BANKS IS SEMI DECENTRALIZED. AT THE NATIONAL LEVEL IT IS RUN BY A BOARD OF GOVERNORS, CONSISTING OF SEVEN MEMBERS APPOINTED BY THE PRESIDENT OF UNITED STATES.

1. T ACCOUNT IS A VISUAL REPRESENTATION OF INDIVIDUAL ACCOUNTS, THAT LOOKS LIKE "T" SO THAT ALL ADDITIONS AND SUBTRACTIONS (DEBIT AND CREDITS) TO THE ACCOUNT CAN BE TRACKED AND REPRESENTED VISUALLY.
   
   TOTAL DEPOSIT (ASSET) = $1,000,000
   RESERVE RATIO = 10%
   LOANABLE AMOUNT = 1,000,000 - (10% OF $1000000)
   = 1,000,000 - 100,000
   = 900,000
   ASSET/DEPOSITS

   DEBIT-	CREDIT+
   $900000

   
   
   

2. HERE LOANS ARE CONSIDER AS REVENUES, BECAUSE OF ITS PROFITS EARN THROUGH INTEREST RATE
   
     ASSET/DEPOSITS

   DEBIT-	CREDIT+
   $900000	$900000 +INTEREST RATE
   $900000	$900000 +INTEREST RATE

   
   

3. 
   ASSET/DEPOSITS

   DEBIT-	CREDIT+
   $900000	$900000 +INTEREST RATE
   $900000 +INTEREST RATE	$900000 +INTEREST RATE
   $900000 +INTEREST RATE	$900000 +INTEREST RATE
   $900000 +INTEREST RATE	$900000 +INTEREST RATE
   $900000 +INTEREST RATE	$900000 +INTEREST RATE