The Economics of Money, Banking and Financial Markets 4th Edition by Frederic Mishkin

تمرين 6

Unless otherwise noted, the following assumptions are made in all questions: The required reserve ratio on checkable deposits iS₁0%, banks do not hold any excess reserves, and the public's holdings of currency do not change.
If the Fed lends five banks a total of $100 million but depositors withdraw $50 million and hold it as currency, what happens to reserves and the monetary base? Use T-accounts to explain your answer.