7. Wolverine Town Bank is the only bank in town when it comes to borrowing or depositing. You may also assume it's the only bank in the economy. Initially, it holds $4000 worth of checking (or demand) deposits, $1000 of reserves, and $3000 of loans. The reserve requirement is 20%. Recall, M0 = Cash\" + Reserves *held by the public M1 = Total Deposits + Cash\" 3. Construct a Taccount for Wolverine Town Bank. What is the ban k's current reserve ratio? What bank's current excess reserve ratio? b. Happy Jack, the town crier, holds the only currency held by the public in the economy. This currency amounts to $500, which he keeps in his wallet. What is M0 and M1? c. How large are the excess reserves of Wolverine Town Bank? Assuming Happy Jack keeps his 5500 in his wallet, what is the maximum amount of M1 that could exist? [Hint: The excess reserves get loaned out in the form of cash. This cash will now go through the money multiplier] d. Assume again that the bank's balance sheet is as stated in the beginning of the question. Happy Jack INSTEAD decides to deposit his $500 in the bank. Show the bank's new balance sheet after this deposit but before it makes any new loans. Now what is the maximum M1 that could exist