Question: 6 . Suppose that Bob withdraws $ 1 0 0 of cash from his checking account at Security Bank and uses it to buy a
Suppose that Bob withdraws $ of cash from his checking account at Security Bank and uses it to buy a camera from Joe, who deposits the $ in his checking account in Serenity Bank. Assuming a reserve ratio of percent and no initial excess reserves, determine the extent to which a Security Bank must reduce its loans and demand deposits because of the cash withdrawal and b Serenity Bank can safely increase its loans as demand deposits because of the cash deposit. Have the cash withdrawal and deposit changed the money supply?
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