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What is its desired reserve ratio

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Reference no: EM132265684

The Bank of ABC has chosen the following initial balance sheet:

Assets: (Reserves- 40; Loans - 460)

Liabilities (Deposits - 500)

a) Based on the Bank of ABC's initial balance sheet, what is its desired reserve ratio?

b) Huck Finn comes along and deposits $10. After Huck's deposit, but before any other actions occur, what is the effect on the total amount of money in the economy? What is the effect on the total amount of currency and deposits in the economy?

Reference no: EM132265684

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