Chat with us, powered by LiveChat GED 303 – Suppose that ADCB makes the maximum | acewriters

Case Study 10 Marks) Read careful the case stud and Answer the question below with details Suppose you deposit S 50000 in currency into your checking account at ADCB Bank. Also assume thatthe required reserve ratio is 15% (£1.1{l}. Answer with detail the following: 1— Suppose that ADCB makes the maximum loan it can from your deposit. What is the effect onADCB balance sheet from granting the loan? (U se T—account if you want}-[1.5 Marks] 2- Now suppose a person took out all the loan in ADCB and put it in his checking account in MEAD.Also NBAD can makes the maximum loan from this deposit. So,what is the effect on NBADbalance sheet?[1.5 Marks] 3— What is the maximum increase in checking account deposit (total money supply} that can resultJfrom your SSDDDD deposit? What is maximum increase in the money supply? E 1 plain.[2 Marks] 4- Suppose you decide to withdraw 525900 from your checking account and use the money to buycertificate of deposit {CD}. Explain how this action will affect M1 and M2.[2 Marks] 5— If the central bank wants to reduce the money supplyI how can the central bank use the openmarket operations and reserve requirements tools to achieve this purpose? Explain.[3 Marks]

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