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The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of 4 %
The table below is the balance sheet for all banks combined in the banking system. All banks have a target reserve ratio of
a The amount of excess reserves is $
b The maximum amount that loans and deposits could be increased by is $
c Assume that the system becomes fully loaned up Show the new balance sheet in the table above.
d Now that the system is fully loaned up the money supply will have increased by $
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