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Economics Bank of Cheerton Assets Liabilities Reserves $7,200 Deposits $90,000 Loans 82,800 Refer to Table 29-4. Assume the Fed's reserve requirement is 6 percent and
Economics Bank of Cheerton Assets Liabilities Reserves $7,200 Deposits $90,000 Loans 82,800 Refer to Table 29-4. Assume the Fed's reserve requirement is 6 percent and all banks besides the Bank of Cheerton are exactly in compliance with the 6 percent requirement. Further assume that people hold only deposits and no currency. Starting from the situation as depicted by the T- account, if the Bank of Cheerton decides to make new loans so as to end up with no excess reserves, then by how much does the money supply eventually increase? 'A. $22,500.00 B. $30,572.69 C. $32,526.93 D. $30,000.00
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