Suppose that Kesha deposits $$7,500$ into her savings account at First Bank. The reserve requirement facing First Bank is $10\%.$

Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign.

a$.$ Use this information to show how First Bank's assets and liabilities initially change when Kesha deposits the $$7,500$ in the bank.

A Simple Bank Balance Sheet

Assets Liabilities

Change in Reserves: $

Change in Deposits: $

b$.$ How much money can First Bank lend out to other people?

$

c$.$ Now suppose that First Bank holds no excess reserves and lends out all of the excess reserves resulting from Kesha's deposit. How do First Bank's assets and liabilities change?

A Simple Bank Balance Sheet

Assets Liabilities

Change in Reserves: $

Change in Loans: $