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Assume a target reserve ratio of 15%. A cheque for $45000 is drawn on an account in Bank B and deposited in a checking deposit
Assume a target reserve ratio of 15%. A cheque for $45000 is drawn on an account in Bank B and deposited in a checking deposit in Bank A. a. By how much have the excess reserves of Bank A increased? b. How much in the form of new loans is Bank A now able to extend to borrowers? c. By how much have reserves of Bank B decreased? d. By how much have excess reserves of Bank B decreased? e. By how much has the money supply increased
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