For the next six questions, consider an economy with only two non-identical banks, called Bank One and Bank Two. In addition to this information, members of the public in this economy hold $6000 in cash, and there are no travelers' checks.
Partial balance sheet information for each bank is given below:
Bank One
Cash in bank $3500
Equity (net worth) $2150
US government bonds $1650
Total savings deposits $14,000
Deposit in the Federal Reserve $5000
Total checking deposits $54,000
Bank Two: US government bonds $950
Total checking deposits $46,000
Cash in bank $2000
Deposit in the Fed $4000
Equity $1850
Total savings deposits $11,000
Questions.... ( rr= 10% or .1)
1.) Economys monetary base combining actual and potential reserves?
2.) Money supply using simplified definition?
3.) Bank two required reserves?
4.) desired excess reserves ratio?