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The Table Given Below Records the Amount of New Deposits

question 97

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The table given below records the amount of new deposits, the value of required reserves, and total amount loaned out by Banks 1, 2, and 3.
Table 12.3
 Bank  New Deposit  Required  Reserves  Loans  Bank 1 $10,000$1,000$9,000 Bank 2 $9,000$900$8,100 Bank 3 $8,100$810$7,290 *Assume all excess reserves are loaned out. \begin{array}{l}\begin{array}{|c|c|c|c|}\hline \text { Bank } & \text { New Deposit } & \begin{array}{c}\text { Required } \\\text { Reserves }\end{array} & \text { Loans } \\\hline \text { Bank 1 } & \$ 10,000 & \$ 1,000 & \$ 9,000 \\\hline \text { Bank 2 } & \$ 9,000 & \$ 900 & \$ 8,100 \\\hline \text { Bank 3 } & \$ 8,100 & \$ 810 & \$ 7,290 \\\hline\end{array}\\\text { *Assume all excess reserves are loaned out. }\end{array}
-Refer to Table 12.3. What is the total increase in the money supply created in the banking system as a result of the initial deposit of $10,000 in Bank 1?

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