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Unformatted text preview: 7. You have looked at round 1 and round 2 of this process. Fill in the table to show the next few rounds of the loan process. Round New Loan Total New Deposits Round 1 Round 2 Round 3 Round 4 Round 5 8. If this process continues, the bank holds no excess reserves, and the public does not change their currency holdings, how much new money can be created in total? 9. Illustrate the final bank balance sheet. 10. Considering the effects of the bond purchase, what do you expect to happen to the following variables? Answer up or down. Bond price Interest rate Money supply...
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This note was uploaded on 11/08/2011 for the course ECO 3203 taught by Professor Yang during the Fall '10 term at University of Central Florida.
- Fall '10