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a. What is the name of the Bank's action? b. Suppose you deposit the f.10,000 in First Student Bank. Show this transaction on First Student
a. What is the name of the Bank's action? b. Suppose you deposit the f.10,000 in First Student Bank. Show this transaction on First Student Bank's T-account. First Student Bank Assets Liabilities C. Suppose the reserve requirement is 20 per cent. Show First Student Bank's T-account if they loan out as much as they can. First Student Bank Assets Liabilities d. At this point, how much money has been created from the Bank of England's policy action? e. What is the value of the money multiplier? f. After infinite rounds of depositing and lending, how much money could be created from the Bank of England's policy action? If during the rounds of depositing and lending some people keep extra currency and fail to deposit all of their receipts, will there be more or less money created from the Bank of England's policy action than you found in part (f)? Why? h. If during the rounds of depositing and lending, some banks fail to loan the maximum amount of reserves allowed but instead keep excess reserves, will there be more or less money created from the Bank of England's policy action than you found in part (f)? Why
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