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C5 Michelle, a holder of a deposit in the G--bank (refer to T--account), withdraws $1000 and deposits this in a Korean commercial bank. Explain the
C5 Michelle, a holder of a deposit in the G--bank (refer to T--account), withdraws $1000 and deposits this in a Korean commercial bank. Explain the G--bank's first course of action and calculate the net changes in M1 and in loans after the banking system's multiplication process, with no cash drain. Bank of Gateman Bank of Ratna Bank of Kong (G--bank) ($hrestha EConomy) (Asian Guerilla Bank) Reserves: Deposits: Reserves: Deposits: Reserves: Deposits: $10,000 $100,000 $5000 $50,000 $7000 $70,000 Loans: Loans: Loans: $90,000 $45,000 $63,000 Target reserve ratio = Target reserve ratio = Target reserve ratio = 10% 10% 10%
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