Rudy Tools Tips Tips pia Homework #11: Chapter 13 (Part 2) and Chapter 14 Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 10% a client of First Main Street Bank, purchases $500,000 of Treasury bills in an open market sale undertaken by the Fed Upan recept of Jake's check, the Fed subtracts $500,000 from First Main Street Bank's Federal Reserve account, thereby extinguishing the money Complete the following table to reflect any changes in First Main Street Bank's balance sheet (before the bank makes any new lens) First Main Street Bank's Balance Sheet Assets Liabilities Because the required reserve ratio is 10%, the $500,000 withdrawal In order to maintain the required reserve ratio, First Main Street Bank now must do this is to its outstanding loans. First Main Street Bank's required reserves by its reserves by One possible way to Now suppose Frances repays her loan of $450,000 to First Main Street Bank by writing a check issued by Second Republic Bark, First Main Stre Bank uses funds from a loan repayment to increase its reserves instead of making new loans. Second Republic Bank then replenishes its reserves by using the funds from loan repayments by Dmitri, who writes a check issued by Third Fidelity Bank Third Fidelity Bank then unes a loan repayment from Latasha to replenish its reserves instead of making new loans. Q Search this course 0x