11. Consider the case of an economy with a fractional reserve banking system, where the reserve ratio is 20%. Suppose the Fed conducts an open market purchase in the amount of $1000. And, for simplicity, let's assume the bond ends up being purchased from Madeline, who then deposits the money she receives in her bank account. BANK-1 BANK-TWO Assets Liabilities Assets Liabilities a) How much will Bank-1 hold on reserves against Madeline's deposit and how much will it lend out? b) Show what will happen at Bank #2 in this banking system. c) What is the total volume of new demand deposits in this economy once the banking system goes through its process of lending?4 *Please remember to label ALL elements of your balance sheets as you respond to parts (a) - (b)