Given currency (C) is $1000, demand deposits (D) are $4000 and the reserve depos

Question

Given currency (C) is $1000, demand deposits (D) are $4000 and the reserve deposit ratio (R) is 0.25 Calculate money supply: M-C+D-S(1000+4000)- S5000 Therefore, the money supply $5000 Calculate monetary base: B-M x R = $5000 x 0.25-52000 Therefore, the monetary base is $2000 Calculate money multiplier M 5000 2.5 B 2000 Therefore, the multiplier is 2.5 Represent Wikbank's Balance sheet: Wikbank's balance sheet Liabilities and Owners Equilty Deposits Debt Capital Owners equity) Assets Reserves $1000 Loans $3000 $4000 S500 Security $500 SO Total $4500 4500

Explanation / Answer

There is nothing in the information that you have posted which will explain 500 on security and debt side. Perhaps you have not posted all relevant information related to investments. The question explain all things except these 2 entries

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