do not use chatgpt... otherwise i will give downvote. The isolated nation of Islandia does not trade with other countries. Its banking system consists of four commercial banksthese banks deal with consumers and businessesand one central bank that deals exclusively with the commercial banks. The central bank has set a reserve requirement of 25 percent. The banks are creatively named First Bank, Second Bank, Third Bank, and Fourth Bank. All of the commercial banks, except for First Bank, have used their excess reserves to issue loans to consumers and businesses. First Bank is holding $350,000 in excess reserves. Suppose First Bank loans all of its excess reserves to a customer to buy a custom-built house. The home builder deposits all of the money it receives for building the house into Second Bank, which then lends all its excess reserves to a customer to buy machines for her factory. The machine manufacturer deposits all of the money received into Third Bank, which lends all its excess reserves to a clothing maker to buy textiles. The textile manufacturer deposits all of the money received into Fourth Bank, which then lends all its excess reserves to a rancher to buy more cattle.

By how much have these rounds of lending increased the money supply in Islandia?