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Numerical exercise 1. Suppose there is an initial deposit in a bank is RO 1000 where CRR is 20%. Calculate the credit creation in first

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Numerical exercise 1. Suppose there is an initial deposit in a bank is RO 1000 where CRR is 20%. Calculate the credit creation in first four banks and equilibrium level. over BANKS INITIAL DEPOSIT CRR DEPOSIT EXCESS RESERVE A 1000 200 800 B 800 160 640 640 128 512 D 512 102.5 409.6 5000 1000 D=4000 1 d = = X AD 1

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