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1. You live in a world with a universal 8% required reserve rate for all depository institutions. Assume an international visitor deposits $20,000 in the

1. You live in a world with a universal 8% required reserve rate for all depository institutions. Assume an international visitor deposits $20,000 in the bank. What will the change in the banks T-account look like immediately after the deposit? Assuming the bank wants no excess reserves, what would its T-account look like after it loans out the excess reserves? What would be the ending T-account if no bank held excess reserves (following the $20,000 deposit)?

2. What is the price of a bond which matures in 6 years, has a 6% coupon rate, and its YTM is 5%?

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