Question: Quantitative Problems 1. If the required reserve ratio is 5% and the Fed loans $1500 to the bank, what is the money multiplier ratio? 2.

Quantitative Problems 1. If the required reserve ratio is 5% and

Quantitative Problems 1. If the required reserve ratio is 5% and the Fed loans $1500 to the bank, what is the money multiplier ratio? 2. From Problem 1, the total amount of new money that will be created is? (Bonus problem 1) Make a graph describing the money creation process in Problem 1 & 2 for the first 5 commercial banks in the banking system? (Bonus problem 2) Briefly describes with the T-table what happens to those 5 banks' balance sheets when participating in the money creation process

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