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National Bank currently has $444 billion in transaction deposits on its balance sheet. The current reserve requirement is 10%. The Federal Reserve is lowering reserve
- National Bank currently has $444 billion in transaction deposits on its balance sheet. The current reserve requirement is 10%. The Federal Reserve is lowering reserve requirements to 5%. Show the balance sheet of National Bank and the Federal Reserve if National Bank converts 95% of its excess reserves to loans and borrowers return 90% of these funds to National Bank as transaction deposits.
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