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Please provide complete work Chase Bank currently has $150 million in transaction deposits on its balance sheet. The current reserve requirement is 4%, but the

Please provide complete work

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Chase Bank currently has $150 million in transaction deposits on its balance sheet. The current reserve requirement is 4%, but the Federal Reserve is increasing the requirement to 6%. Assume U.S. banks withdraw all excess reserves and give out loans. a. Assume also that borrowers eventually return all of these funds to their bank in the form of transaction deposits. What is the full effect of this purchase on bank deposits and money supply? Please estimate the effect for both reserve requirements. b. What is the full effect of this purchase on bank deposits and the money supply if the borrowers return only 80 percent of these funds to their banks in the form of transaction deposits. Again, please explain for both reserve requirements

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