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Use the following information to answer questions 7 through 8: Consider the following balance sheet for the bank. Assets Liabilities Reserves 500 Deposits 3000 Loans

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Use the following information to answer questions 7 through 8: Consider the following balance sheet for the bank. Assets Liabilities Reserves 500 Deposits 3000 Loans 2500 8. Suppose clients wants to withdraw 2500 deposits, the bank can only reclaim 500 loans from firms and FED is about to hand a hand to this bank, how much currency should FED issue? Explain your answers and consider whether the money multiplier still functions in this scenario

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