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Assume bank A has an increase in deposits of $20 million dollars and that all banks face a reserve requirement are 10 percent. Also assume
Assume bank A has an increase in deposits of $20 million dollars and that all banks face a reserve requirement are 10 percent. Also assume bank A loans out the full amount of the deposit increase it is allowed and this amount winds up deposited in Bank B. Bank B then lends out the full amount it is possible as well and this amount winds up deposited in Bank C. What is the total increase in deposits resulting from these three banks? Show all work. Carry all calculations out to four (4) decimal places. Highlight in bold your answer.
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