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8. Consider a new deposit to the Canadian banking system of $1000. Suppose that all commercial banks have a target reserve ratio of 10 percent

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8. Consider a new deposit to the Canadian banking system of $1000. Suppose that all commercial banks have a target reserve ratio of 10 percent and there is no cash drain. The following table shows how deposits, reserves, and loans change as the new deposit permits the banks to create money. Round Change in Deposits Change in Reserves Change in Loans First '5 1,000 $ 100 $ 900 Second Third Fourth Fifth a. The rst round has been completed in the table. Now, recalling that the new loans in the rst round become the new deposits in the second round, complete the second round in the table. b. Complete the entire table. c. After the fth round, what is the total change in deposits so far as a result of the single new deposit of $1,000

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