Initial deposit ($100) The Money Multiplier Process Loan Loan University Bank Excess reserves: $25 Required reserves:...

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Initial deposit ($100) The Money Multiplier Process Loan Loan University Bank Excess reserves: $25 Required reserves: $75 Deposit Bank #2 How large a loan can Bank #2 in the figure above make? Deposit Excess reserves: $6.25 Required reserves: $18.75 Bank # 3 Loan Deposit Excess reserves: $1.56 Required reserves: $4.69 Bank #4 etc. Excess reserves: $0.39 Required reserves: $1.17 Initial deposit ($100) The Money Multiplier Process Loan Loan University Bank Excess reserves: $25 Required reserves: $75 Deposit Bank #2 How large a loan can Bank #2 in the figure above make? Deposit Excess reserves: $6.25 Required reserves: $18.75 Bank # 3 Loan Deposit Excess reserves: $1.56 Required reserves: $4.69 Bank #4 etc. Excess reserves: $0.39 Required reserves: $1.17

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The money multiplier process is a series of transactions that occurs when a bank makes a loan and cr... View the full answer