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Assets Liabilities Reserves $75 Million Deposits $600 million Loans $625 million Bank Capital $100 million A) Suppose the bank responds to the reserve deficiency by
Assets Liabilities
Reserves $75 Million Deposits $600 million
Loans $625 million Bank Capital $100 million
A) Suppose the bank responds to the reserve deficiency by borrowing from the FED. Show the new balance sheet. Assume the reserve requirement ratio is 10%
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