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Question 1

Consider the following balance sheet for Capital One.

AssetsLiabilities
Reserves351Deposits1300
Loans949

Suppose that Capital One is a typical bank and keeps only the required reserves. Given this data, what is the money multiplier?

Hint

Question 2

Consider the following balance sheet for US Bank.

AssetsLiabilities
Reserves731Deposits1700
Loans969

Suppose that US Bank is a typical bank and keeps only the required reserves. In addition, suppose that someone deposited $700.

Given this data, what is the total change in the M1 Money Supply?

Hint

Question 3

Consider the following balance sheet for TD Bank.

AssetsLiabilities
Reserves351Deposits2700
Loans2349

Suppose that someone deposited $400 at TD Bank.

Given this data, what is the maximum amount by which the money supply will increase?

Hint