What is total change in deposits and value of money supply

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Problem: Assumption: The desired (mandatory) reserve ratio is 10% and the bank's initial balance sheet is: Assets Liabilities Loans: $900 Deposits: $1000 Total reserve at the central bank $100 The bank receives a new deposit in $100 notes. Show the bank's balance sheet immediately after receiving the deposit Assumption: the bank wants to keep only the exact amount of reserve requirement at the central bank). What is the total change in deposits and the value of money supply creation? It is assumed that all the deposits created will be made in this same bank (this is the only bank in the economy). What will the bank's balance sheet be?

Reference no: EM133614240

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