Econ 121 Midterm Exam – II

Suppose that both banks suffer a loan loss of $6 million, How will their balance sheets look like now? (0.5 point for each balance sheet) For the First National Bank, Assets: Reserves 10; Loans 84; Liabilities: Deposits 90; Bank Capital 4. For the Second National Bank, Assets: Reserves 10, Loans 84; Liabilities: Deposits 95, Bank Capital -1. c. ................
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