week 4

Read the following scenario and write a 1 page summary based on the prompts that follow.

For this assignment, you must assume that all other banks hold only the required amount of reserves.

  • If First National decides to loan out its excess reserves, by how much would the economy’s money supply increase?
  • Provide an overview of the scenario.
  • Identify key Issues or problems that may exist.
  • Provide your conclusion of this scenario.
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