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Increase The Loans Account And The Account

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Sandra Watson
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Use the information presented in Midwestern Mutual Bank’s balance sheet to answer the following questions.

Bank’s Balance Sheet
AssetsLiabilities and Owners’ Equity
Reserves$200Deposits$675
Loans$800Debt$250
Securities$1,000Capital (owners’ equity)$1,075

Suppose the owners of the bank borrow $100 to supplement their existing reserves. This would ______ (increase or decrese)  the reserves account and increase the _____ account.

This would also bring the leverage ratio from its initial value of   to a new value of   .

Which of the following do bankers take into account when determining how to allocate their assets? Check all that apply.

The total value of liabilities

The size of the monetary base

The reserve requirement

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