Suppose you deposit $$3500$ in currency into your chequing account at a branch of

Bank X$,$ which we will assume has no excess reserves at the time you make your

deposit. Also assume that the desired reserve ratio is $0\mathrm{.}25,$ or $25$ percent.

a$.$ Use the first row of the first T$-$account to the right to show the initial impact of

this transaction on Bank X$\text{'}$s balance sheet.

b$.$ Suppose that Bank X makes the maximum loan it can from the funds you

deposited. Using the second and third rows of the first T$-$account to the right, show

the initial impact of granting the loan on Bank X$\text{'}$s balance sheet. Assume the loan

is made through the borrower's chequing account.