QUESTION 7 Refer to the T account for an imaginary bank Assets Liabilities Reserve $3,000 Deposits $10,000 Loan $7,000 Based on the information given in the table calculate the following: 1. If the reserve ratio is 10% then calculate any excess reserve. 2. If the bank decides to loan out the excess reserve then how much money supply that excess reserve can create? Note: Make sure to show all the steps. Writing just the answers is not enough.

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