Assume that no banks hold excess reserves

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Assume that no banks hold excess reserves, and the public holds no currency. If a bank sells a $100 security to the Fed, explain what happens to this bank and three additional steps in the deposit expansion process, assuming a 10% reserve requirement. How much do deposits increase for the banking system when the process is completed? Use T-accounts to address the banks' behavior.

Reference no: EM131377270

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