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Business, 25.11.2019 22:31 arrazolokhaliapb8sc2

Suppose first main street bank, second republic bank, and third fidelity bank all have zero excess reserves. the required reserve ratio is 20%. the federal reserve buys a government bond worth $750,000 from jacques, a client of first main street bank. he deposits the money into his checking account at first main street bank. a) complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 20%. amount depositedchange in excess reserveschange in required reserves $750,000 now, suppose first main street bank loans out all of its new excess reserves to eleanor, who immediately uses the funds to write a check to darnell. darnell deposits the funds immediately into his checking account at second republic bank. then second republic bank lends out all of its new excess reserves to jacques, who writes a check to kyoko, who deposits the money into her account at third fidelity bank. third fidelity lends out all of its new excess reserves to rina as well.

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Suppose first main street bank, second republic bank, and third fidelity bank all have zero excess r...

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