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Exercise 2 This exercise shows how the multiplier process works. Assume that all...

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Accounting

Exercise 2
This exercise shows how the multiplier process works.
Assume that all banks in the system lend all of their excess reserves, that the reserve ratio for all banks is 0.25, and that all loans are retumed to the banking system in tho form of transactions accounts. Uso the information from the balance sheets in Table 13.2, Table 13.3, Table 13.4, and Table 13.5 to answer Questions 1-6.
Table 13.2. Initial balance sheet for Bank A, Bank B, & Bank C
\table[[Assets,Llabilitios],[Required reserves,$25,000,Transactions accounts,$100,000
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