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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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