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Question 1-Deposit Creation Suppose Ivan withdraws 200S in cash from his checking account using an ATM. Assume that the required reserve ratio is 5%. i)

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Question 1-Deposit Creation Suppose Ivan withdraws 200S in cash from his checking account using an ATM. Assume that the required reserve ratio is 5%. i) Using T-accounts, show the effect of this operation on the balance sheet of the banking sector, the non-bank public and the Federal Reserve. Banking sector Non-Bank Public Federal Reserve ii) Make the assumption that the non-bank public does not hold any currency and banks do not hold any excess reserves. What is the total resulting deposit creation? Question 1-Deposit Creation Suppose Ivan withdraws 200S in cash from his checking account using an ATM. Assume that the required reserve ratio is 5%. i) Using T-accounts, show the effect of this operation on the balance sheet of the banking sector, the non-bank public and the Federal Reserve. Banking sector Non-Bank Public Federal Reserve ii) Make the assumption that the non-bank public does not hold any currency and banks do not hold any excess reserves. What is the total resulting deposit creation

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