Answer to Question #91190 in Macroeconomics for Harmeet Kaur

Question

Consider a withdrawal of $5000 from the Canadian banking system. Suppose all commercial banks
have a target reserve ratio of 8 percent and there is no cash drain. (HOMEWORK ASSIGNMENT)
a. Using a table like that shown in the previous question, show the change in deposits, reserves,
and loans for the first three “rounds” of activity.
b. Compute the eventual total change in deposits, reserves, and loans.

Answer 1

Dear Harmeet Kaur, your question requires a lot of work, which neither of our experts is ready to perform for free. We advise you to convert it to a fully qualified order and we will try to help you. Please click the link below to proceed: Submit order