1. There is a 12.5% reserve requirement. Suppose the fed prints $2,000,000 which gets deposited into Bank A. Bank A loans the money which gets deposited into Bank B. Bank B loans the money, etc.

a. Fill in the table in the spreadsheet tab labeled "Problem 1" and submit the excel file with your answer document.

b. Use the formula to calculate the deposits and reserves for the entire banking system (i.e., not just banks A through O, but all banks, A through infinity).

Problem 1 Table

There is a 12.5% reserve requirement. Suppose the fed prints $2,000,000 which gets deposited into Bank A. Bank A loans the money which gets deposited into bank B. Bank B loans the money, etc. Fill in the table below.
Bank	Deposits	Required Reserves	Loans
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O