Consider the balance sheet for the Wahoo bank as presented below. Wahoo Bank Balance Sheet Assets Liabilities government securities $1,600 Liabilities:                     Checkin…

Consider the balance sheet for the Wahoo bank as presented
below.

Wahoo Bank Balance Sheet

Assets

Liabilities

government securities

$1,600

Liabilities:                    
Checking accounts

$4,000

Required Reserves

$400

Net Worth

$1,000

Excess Reserves

$0

Loans

$3,000

Total Assets

$5,000

Total Liabilities

$5,000

Using a required reserve ratio of 10% and assuming that the bank
keeps no excess reserves, write the changes to the balance sheet
for each of the following scenarios:

Bennett withdraws $500 from his checking account.
The Fed buys $1,000 in government securities from the
bank.

4) Using a required reserve ratio of 10% and assuming that banks
keep no excess reserves, which of the following scenarios produces
a larger increase in the money supply, explain why.
a) Someone takes $1000 from under his
or her mattress and deposits it into a checking account.
b) The Fed purchases $1,000 in
government securities from a commercial bank