Course: Introductory Macroeconomics Topic: How is Money created through a Banking System? Suppose a business firm deposited $1000 in Bank #1 and the desired reserve ratio is 0.5, which means that the banks are allowed to loan out half of their deposits. What would be the total money after the deposit-loan-deposit process? BUSINESSES DEPOSIT ($) BANKS RESERVE ($) LOANED ($) BUSINESS #1 1,000 BANK #1 500 500 BUSINESS #2 BANK #2 BUSINESS #3 BANK #3 BUSINESS #4 BANK #4 BUSINESS #5 BANK #5 BUSINESS #6 BANK #6 BUSINESS #7 BANK #7 BUSINESS #8 BANK #8 BUSINESS #9 BANK #9 BUSINESS #10 BANK #10 BUSINESS #11 BANK #11 BUSINESS #12 BANK #12 BUSINESS #13 BANK #13 BUSINESS #14 BANK #14 TOTAL 1,000 500 500 MOTO CHARQUING Liability & Net worth DEMAND DEPOSITS Capthen stock