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Question Two: Use the following to answer questions below the table: Table (1): ABC Bank balance sheet Assets Liabilities Total Reserves AED 80,000 Demand Deposits

Question Two: Use the following to answer questions below the table:

Table (1): ABC Bank balance sheet

Assets

Liabilities

Total Reserves AED 80,000

Demand Deposits AED 200,000

Loans AED 120,000

1) Refer to Table (1). With a required reserve ratio of 25 percent, ABC Bank could change Money

Supply of: (show your answer) .

2)Refer to Table (1). With total reserves of $80,000 and a required reserve ratio of 25 percent, ABC Bank could support maximum Money Supply of: (show your answer)

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