How to solve

Exercise $2$

This exercise shows how the multiplier process works.

Assume that all banks in the system lend all of their excess reserves, that the reserve ratio for all banks is $0\mathrm{.}20,$ and that all loans are returned to the banking system in the form of transactions deposits. Use the information from the Balance Sheets in Table $13\mathrm{.}2,$ Table $13\mathrm{.}3,$ Table $13\mathrm{.}4,$ and Table $13\mathrm{.}5$ to answer Questions $1-6.$

Table $13\mathrm{.}2$ Bank A $-$ Initial Balance Sheet

$\backslash$table$[[$Assets$],[$Liabilities$,,],[$Required reserves,$$20,000,$Transaction accounts,$$100,000$