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Consider a new deposit to the Canadian banking system of 57.500 Suppose that all commerCial banks have a target reserve ratio (v) of 20 percent

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Consider a new deposit to the Canadian banking system of 57.500 Suppose that all commerCial banks have a target reserve ratio (v) of 20 percent and there is no cash drain a The first round has been completed In the table below New. recalling thatthe new loans In the first round become the new deposits In the second round. complete the table {Roundvour responses to the nearest dollar ltyou have rounded a number and need to use rt in another calcutatlon you should use this rounded value For exampte. rt the new loans in the second round are found to be $1,255.76 and rounded to $11256. then if at some later pornt you need to use {hrs value. you should use $1.256. not $1,255. 76.} Round A in Deposits AReserves ALaans First $7.500 $1.500 $6.000 Second 5 g, $ Third $ $ $ Fourth $ $ $ the depositecreation process. The total change in oepOSits so tar as a result oft e Single new depoSit is $ {Round your response to {he nearesrdollar Use b You have now completed the first four rounds o the rounded numbers from {he rabte above ) c. The deposit-creation process could go on forever: but it would still have a finite sum The eventual total change in deposits is equal to Mr times the new deposit: where v is the target reserve ratio In this case the eventual total change in deposits is equal to 5 (Round your response to the nearest dollar) o and the eventual total change in loans is equal to $ . (Round your responses to the nearest dollar.) d The eventual total change in reserves is equal

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