Humongous Bank is the only bank in the economy. The people in this economy have $20 million in money, and they deposit all their money in Humongous Bank (show all work and calculations). Humongous Bank is required to hold 5% of its existing $20 million as reserves, and to loan out the rest. What the amount of the required reserves? Assume no loans have been made, how many loans can be made now? What is the money multiplier?   Assume that Humongous bank is part of a multibank system. If all money is loaned out, how much can the money supply increase?

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