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Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 10%. Clancy,

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Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 10%. Clancy, a Southeast Mutual Bank customer, deposits $500,000 into his checking account at the local branch. Complete the following table to reflect any changes in Southeast Mutual Bank's T-account (before the bank makes any new loans). Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 10%. Hint: If the change is negative, be sure to enter the value as negative number. Now, suppose Southeast Mutual Bank loans out all of its new excess reserves to Becky, who immediately uses the funds to write a check to Alex. Alex deposits the funds immediately into his checking account at Walls Fergo Bank. Then Walis Fergo Bank lends out all of its new excess reserves to Hubert, who writes a check to Elleen, who deposits the money into her account at PJMorton Bank. PJMorton lends out alf of its new excess reserves to Kate in turn. Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dovlar. osited into a checking account keeping any esults in an overall increase of in deman Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dollar. Assume this process continues, with each successive loan deposited into a checking account and no banks keeping any excess reserves. Under these assumptions, the $500,000 injection into the money supply results in an overall increase of in demand deposits. Assets \begin{tabular}{|c|c|} \hline Building and furniture \\ Deposits \\ Loans to show the effect of a new deposit on excess and \\ \hline Net worth \\ \hline Reserves \\ \hline hive sure to enter the value as negative number. \end{tabular}

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