Use a T-Account to record a customer deposit of $20, 000 into a checking account. Assume a fully loaned up system, no cash leakages and a required reserve of 10%.

a.Show a properly labeled T Account

b.Indicate the maximum amount that a bank can loan out following the deposit.

c.Indicate the potential money supply creation andchange to money supply. Show your calculations

d.If the Fed increased the reserve ratio to 20%, what would be the impact on the money supply creation? Show the calculations

e.How will the money supply creation be affected if the public wishes to hold the currency rather than deposit the currency in the bank?