Please answer questions. Thanks.

Chapter 5

Problem 1:

Assume that Banc One receives a primary deposit of $1 million. The bank must keep reserves of 20 percent against it deposits. Prepare a simple balance sheet of assets and liabilities for Banc One immediately after the deposit is received.

Problem 6:

Assume a financial system has a monetary base of $25 million. The required reserves ratio I 10 percent and there are no leakages in the system.

What is the size of the money multiplier?

What will be the system