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Suppose the Second National Bank has the following simplified balance sheet.The reserve ratio is 25% and all dollar figures are in thousands. Assume that households and businesses deposit $10 in this bank and that this currency is added to the bank's reserves.(a) In column (1) show the bank's balance sheet after this occurs.Is there a change in the money supply?
(b) In column (2) show what would happen if the bank now loans all of its excess reserves to a depositor.Is there a change in the money supply?
Tacit Knowledge
People’s underlying and implicit beliefs about a task or an event.
Explicit Knowledge
Knowledge that can be articulated, codified, and communicated; it includes facts, information, and skills that a person can convey in a systematic and formal manner.
Spatial Updating
The processes by which individuals continually revise their mental representation of where things in the environment are with respect to their current location.
Demand Characteristics
Demand characteristics refer to the subtle cues or features in an experimental environment that may influence participants' behaviors or responses, thereby affecting the validity of the experiment.
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