Problem 1: Macroeconomics Money Creation Charlie Brown is digging around in his attic and finds $2,000 in an old trunk. He takes the money to his bank and deposits the $2,000 in his checking account. Explain the first four rounds of the deposit creation process if the required reserve ratio is 25 percent and if people keep no currency outside of the banking system. Show your calculations. Deposit 1. 2. 3. 4. Required Reserves Excess Reserves a. Based on your answers above, what is the total amount of loans that can be created from the $2,000 deposit? Problem 2: If Looney Tunes Bank receives an additional deposit of $50,000 and the required reserve ratio is 18 percent, what is the amount of new loans Looney Tunes Bank can make. Show any calculations. Problem 3: The required reserve ratio is 25 percent. Porky Pig deposits $1,000 in Looney Tunes Bank. Looney Tunes Bank keeps its minimum required reserves and lends the excess to Peppy LaPew. Peppy LaPew spends his loan at Wal- Mart Wal-Mart deposits the check it receives from Peppy LaPew in The Jedi Credit Union. Jedi Credit Union keeps its minimum required reserves and lends the excess to Dorothy of Kansas. Dorothy of Kansas spends her loan at Over The Rainbow Shoe Store. Over the Rainbow Shoe Store deposits the check it receives from Dorothy of Kansas in the Wonderland Savings and Loan. Wonderland Savings and Loan keeps its minimum required reserves and lends the excess to the Mad Hatter to help cover costs for his annual tea party. How much can Wonderland Savings and Loan lend to the Mad Hatter? Show how you got your answer.