Question
Hi, I am working on a macroeconomics project using the money multiplier. I am given a t account with assets on the left and liabilities
Hi, I am working on a macroeconomics project using the money multiplier. I am given a t account with assets on the left and liabilities on the right. Under assets I have required and excess under "total reserves." The required amount is 12 million and the excess amount is 5 million. Also under total reserves is securities of 2 million, loans of 46 million. It then says total assets is 65 million. Under the Liabilities side I am given deposits of 65 million making total liabilities 65 million. I am then told that since the bank has excess reserves it makes loans to smaller businesses. The question I have is what will the t account of the bank look like after it fully utilizes its lending capacity?
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