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1. Fill in the table below to show what happens when the Federal Reserve buys $100,000 in securities when the reserve rate is 10%. Assume

1. Fill in the table below to show what happens when the Federal Reserve buys $100,000 in securities when the reserve rate is 10%. Assume that all excess reserves are loaned out.

Assets | Liabilities

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Bank ONE

Assets | Liabilities

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Bank TWO

Assets | Liabilities

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Flag question: Question 2Question 22 pts

Write the formula for the money multiplier and use it to calculate the total effect that the above security purchase will have on the money supply.

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