Problem 2: Balance Sheets & The Money Supply [7 Points] Suppose that the commercial bank reserve ratio is currently 20%. A bank begins with $2,000 of capital, and receives $20,000 in deposits. 10. Fill in the following table for the above bank? [2 points] Assets ($) Liabilities ($) Reserves Deposits Loans Capital Total Total Now suppose that 520,000 is the initial deposit into this banking system. Assume going forward that capital is equal to zero. Assume also that there is $50,000 of cash in the economy. The bank reserve ratio remains 20%. Cash drain is 0%. 11. How much deposits are generated across the entire banking system as a result of this initial $20,000 deposit? [2 points] 12. What is the total Money Supply in this economy? [1 point] Now suppose that the Government financial regulator drops the reserve requirements from 20% to 10%. 13. What is the change in the Money Supply as a result of this change in the reserve requirements? [2 points]