ABC Company deposits a check in the amount of $850,000 in its DD Deposit at Bank (X). Assume LRR = 16 %

1. Construct the balance sheet of Bank (X) and the Consolidated Balance sheet of the banking system. State the effect of this transaction on Bank (A) and the Banking System ( 1.5 points)
2. Calculate the M-SS multiplier. (0.75 point)
3. Calculate the effect on M-SS of the economy and state the effect on M-SS. (1 point)