Consider a withdrawal from the Canadian banking system of $2,500. Suppose that all commercial banks have a target reserve ratio (v) of 10 percent and there is no cash drain. a. The first round has been completed in the table below. Recalling that the new loans in the first round become the new deposits in the second round. Using the same approach, complete the table. (Round your responses to the nearest dollar. If you have rounded a number and need to use it in another calculation, you should use this rounded value. For example, if the new loans in the second round are found to be -$1,255.76 and rounded to -$1,256, then if at some later point you need to use this value, you should use -$1,256, not-$1,255.76.) Round & in Deposits -$2,500 First Second Third Fourth AReserves $250 ALoans -$2,250

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Chapter1: Making Economics Decisions
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Consider a withdrawal from the Canadian banking system of $2,500. Suppose that all commercial banks have a target reserve ratio (v) of 10 percent and there is no cash
drain.
a. The first round has been completed in the table below. Recalling that the new loans in the first round become the new deposits in the second round. Using the
same approach, complete the table. (Round your responses to the nearest dollar. If you have rounded a number and need to use it in another calculation, you should use this
rounded value. For example, if the new loans in the second round are found to be -$1,255.76 and rounded to -$1,256, then if at some later point you need to use this value,
you should use -$1,256, not-$1,255.76.)
Round & in Deposits
-$2,500
First
Second
Third
Fourth
AReserves
$250
ALoans
-$2,250
Transcribed Image Text:Consider a withdrawal from the Canadian banking system of $2,500. Suppose that all commercial banks have a target reserve ratio (v) of 10 percent and there is no cash drain. a. The first round has been completed in the table below. Recalling that the new loans in the first round become the new deposits in the second round. Using the same approach, complete the table. (Round your responses to the nearest dollar. If you have rounded a number and need to use it in another calculation, you should use this rounded value. For example, if the new loans in the second round are found to be -$1,255.76 and rounded to -$1,256, then if at some later point you need to use this value, you should use -$1,256, not-$1,255.76.) Round & in Deposits -$2,500 First Second Third Fourth AReserves $250 ALoans -$2,250
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