You just deposited $$4,000$ in cash in a checking account at the local bank. Assume that banks lend out all excess reserves and that there are no leaks in the banking system. That is$,$ all money lent by banks gets deposited in the banking system. Round $y$ answers to the nearest dollar.

If the reserve requirement is $14\%,$ how much will your deposit increase the total value of checkable bank deposits?

$

If the reserve requirement is $5\%,$ how much will your deposit increase the total value of checkable deposits?

$

Decreasing the reserve requirement the money supply.

increases

decreases