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(Solved): Deposits in a bank create both an asset and liability for the bank. Assume a customer deposits $10, ...




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Deposits in a bank create both an asset and liability for the bank. Assume a customer deposits into bank . Use the table below to answer questions \#1 through . BANK A ASSETS LIABILITIES ASSETS reserves checkable deposits Assume: the required reserve ratio is to 1. Calculate required reserves 2. Calculate the excess reserves 3. Calculate the deposit expansion multiplier 4. Calculate the maximum increase in new deposits from the initial deposit into bank 5. If the required reserve ratio changes to what will happen to the banks lending ability (increase or decrease) ?


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