Home » Suppose that the T-account for Scotiabank is as follows: Assets: Reserves: $8,100 Loans: $72,900 Liabilities: Deposits:

Suppose that the T-account for Scotiabank is as follows: Assets: Reserves: $8,100 Loans: $72,900 Liabilities: Deposits:

 Suppose that the T-account for Scotiabank is as follows:


Reserves: $8,100

Loans: $72,900


Deposits: $81,000

(a) If the Central Bank requires banks to hold 10 % of deposits as reserves, how much in excess reserves does Scotiabank holds?                                        

(b) The Central Bank requires banks to hold a reserve ratio of 5% in 2019 and 20% in 2020. Calculate the money multiplier for each year.                                 

(c) “The amount of reserves banks hold is related to the amount of money the banking system creates through the money multiplier”. Discuss briefly the impact of this statement in terms of the two answers derived for the money multiplier in part (b).                                                                           

2. Assume that the banking system has deposits of $100 billion. Assume also that the required reserves are 10% of chequing deposits and that banks hold no excess reserves and households hold no currency.

(a) Calculate the money multiplier.

(b) Calculate the money supply.

(c) Suppose the central bank raises the required reserves to 20% of deposits. Calculate the new money multiplier and the new money supply.

Show more

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10