Business, 15.07.2019 21:20 FinnaCryDotJpeg

Tracy williams deposits $500 that was in her sock drawer into a checking account at the local bank. a. how does the deposit initially change the t-account of the local bank? how does it change the money supply? b. if the bank maintains a reserve ratio of 10%, how will it respond to the new deposit? c. if every time the bank makes a loan, the loan results in a new checkable bank deposit in a different bank equal to the amount of the loan, by how much could the total money supply in the economy expand in response to tracy’s initial cash deposit of $500? d. if every time the bank makes a loan, the loan results in a new checkable bank deposit in a different bank equal to the amount of the loan and the bank maintains a reserve ratio of 5%, by how much could the money supply expand in response to tracy’s initial cash deposit of $500?

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Tracy williams deposits $500 that was in her sock drawer into a checking account at the local bank....