Question: How would I go about solving this problem ? Suppose that the required reserve ratio is 10%, that there is no currency, that banks never

How would I go about solving this problem ?

Suppose that the required reserve ratio is 10%, that there is no currency, that banks never hold any excess reserves, and that the Fed sells $400 million in securities to Bank 1. This OMO then works its way through Banks 2, 3, etc., in chronological order. Which of the following shows the changes in assets and liabilities in Bank2? All values are in millions of dollars. 0 Deposits decrease by $360, Reserves decrease by $36, Loans decrease by $324. 0 Deposits increase by $360, Reserves increase by $36, Loans increase by $324. 0 Deposits increase by $400, Reserves increase by $40, Loans increase by $360. 0 Deposits decrease by $400, Reserves decrease by $40, Loans decrease by $360

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