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Capital inflow: 6. The following T-account shows the assets and liabilities of all banks in Canada. The reserve ratio is 10%. All financial transactions occur

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Capital inflow: 6. The following T-account shows the assets and liabilities of all banks in Canada. The reserve ratio is 10%. All financial transactions occur within the banking system. No one holds cash. Assets Liabilities Actual reserves $200 million Deposits $1000 million Loans $700 million Bonds $100 million a) What is the amount of total desired reserves? What is the amount of excess reserves? Required Reserves: Excess Reserves:_ b) What will be the final T-account after all of the excess reserves are loaned out? Assets Liabilities Actual reserves Deposits Loans Bonds c) After all the multiplier processes have taken place, what will be the change in money supply? Change in MS 8

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