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The Money Multiplier Process Initial Loan Loan Loan deposit University Bank Bank Bank elc. Deposit Deposit Deposit ($100) Bank #2 13 Excess reserves: $25 Excess
The Money Multiplier Process Initial Loan Loan Loan deposit University Bank Bank Bank elc. Deposit Deposit Deposit ($100) Bank #2 13 Excess reserves: $25 Excess reserves: $6.25 Excess reserves: $1.56 Excess reserves: $0.39 Required reserves: $75 Required reserves: $18.75 Required reserves: $4.69 Required reserves: $1.17 How large a loan can Bank #2 in the figure above make
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