Use the following information to answer questions 8-10.
This is the T-account for National Bank, the only commercial bank in the country.
reserve requirement, set by the Federal Reserve, is currently 20%.
Use this information to
answer the following questions.
) Assume that the bank meets the reserve requirement but does not hold any
What is the level of loans?
) The Federal Reserve buys $100,000 worth of bonds in open-market operations.
Assume that all funds are deposited into accounts at National Bank.
What is the new level of deposits?
) What is the size of the money multiplier?