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Examine the following balance sheet of Bank B: Assets Liabilities Total Reserves $362 Chequable deposits $611 Loans $634 Capital Shares 5589 Government Securities $204 Assume
Examine the following balance sheet of Bank B: Assets Liabilities Total Reserves $362 Chequable deposits $611 Loans $634 Capital Shares 5589 Government Securities $204 Assume the desired reserve ratio is 20%. a. Calculate the excess reserves of Bank B. $ (Round your answer to the nearest penny.) b. How much money can Bank B lend out in the next round? $ (Round your answer to the nearest penny.) c. If Bank Blends the money in part (b) of this problem, what are the new values for total reserves? For chequable deposits? For loans? (Round your answers to the nearest dollar.) Total Reserves: Chequable Deposits: Loans: d. What is the maximum expansion of the money supply (increase in demand deposits) if Bank Blends the amount suggested in part (b) of this problem? $ (Round your answers to the nearest dollar, and all banks in the system lend and redeposit the maximum available.)
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