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#2-5 with written work please Use the following information to answer questions 2-5: The banking system has $8,000 in reserve, $22,000 in loans, and $30,000
#2-5 with written work please
Use the following information to answer questions 2-5: The banking system has $8,000 in reserve, $22,000 in loans, and $30,000 in deposits. If the reserve requirement is 10%. 2. what is the maximum amount of loans the banking system could make? (1.5 points) 3. If the Fed lowers reserve requirement to 5%, what is the maximum amount of loans the banking system could make? (1.5 points) 4. If the Fed lowers reserve requirement to 5%, the banking system converts all excess reserves to loans, but borrowers return only 50% of these funds to the banking system as deposits. What is the maximum amount of loans the banking system could make? (1.5 points) 5. If the Fed lowers reserve requirement to 5%, the banking system converts 75% excess reserves to loans, but borrowers return only 60% of these funds the banking system as deposits. What is the maximum amount of loans the banking system could make? (1.5 points) Step by Step Solution
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