Working through a change in the reserve requirementAssume that the following table portrays the balance sheet of First Eastern bank.Assets Liabilities and Net Worth Vault Cash$150,000 Deposits$900,000Deposits at Fed$250,000 Loans$500,000 Total$900,000 Total$900,000If the Fed were instead to set the required reserve ratio to 0.10, required reserves would be $_, excess reserves would be$_, and the maximum increase in the money supply would be $_.

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Answered: Assume that the following table…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter12: Money, Banking And The Financial System

Section: Chapter Questions

Problem 4WNG

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Working through a change in the reserve requirement

Assume that the following table portrays the balance sheet of First Eastern bank.

Assets
Vault Cash	$150,000	Deposits	$900,000
Deposits at Fed	$250,000
Loans	$500,000
Total	$900,000	Total	$900,000

If the Fed were instead to set the required reserve ratio to 0.10, required reserves would be $_, excess reserves would be$_, and the maximum increase in the money supply would be $_.

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