Question: For the last three questions of the assignment, consider Alpha Bank, which has the following (partial) balance sheet information:
Cash $25,000
Checking accounts $125,000
US government bonds $10,000
Deposit in the Fed $50,000
Savings accounts $20,0000
- Calculate this bank's actual reserves on hand, carefully following all numeric instructions.
- Calculate the maximum amount of new money Alpha Bank can create on its own, carefully following all numeric instructions.
- Calculate the maximum amount of new money the entire banking system can create, given this information, carefully following all numeric instructions.