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5, (0.6 pt) Beleaguered State Bank (BSB) holds $25 million in deposits and maintains a reserve ratio of 10 percent. a. Show a T-account for

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5, (0.6 pt) Beleaguered State Bank (BSB) holds $25 million in deposits and maintains a reserve ratio of 10 percent. a. Show a T-account for BSB b. Now suppose that BSB's largest depositor withdraws $10 million in cash from her account. If BSB decides to restore its reserve ratio by reducing the amount of loan outstanding, show its new T-account. (Make sure to show all your work.) 6. (0.6 pt) Assume that the banking system has total reserves of $100 billion. Assume also that required reserves are 10 percent of checking deposits and that banks hold no excess reserves and households hold no currency (Make sure to show all your work.) a. What is the money multiplier? What is the money supply? b. If the Fed now raises required reserves to 20 percent of deposits, what is the new money multiplier and the change in the money supply

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