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SCENARIO: The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank

SCENARIO: The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up.

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New Deposit Required Reserve Loans Bank No. 1 $100,000.00 $5,000.00 $95,000.00 Bank No. 2 $95,000.00 $4,750.00 $90,250.00 Bank No. 3 $90,250.00 $4,512.50 $85,737.50 Bank No. 4 $85, 737.50 $4,286.87 $81,450.63

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