Assume there was a new $100,000 deposit into a checking account at a bank.

a. What would be the resulting excess reserves created by that deposit if banks faced a reserve requirement of

10 percent? _____________

20 percent? _____________

25 percent? _____________

50 percent? _____________

b. How many additional dollars could that bank lend out as a result of that deposit if banks faced a reserve requirement of

10 percent? _____________

20 percent? _____________

25 percent? _____________

50 percent? _____________

c. How many additional dollars of money could the banking system as a whole create in response to such a new deposit if banks faced a reserve requirement of

10 percent? _____________

20 percent? _____________

25 percent? _____________

50 percent? _____________