Directions
Instead of a discussion board, this week you will submit an individual written assignment that illustrates the role commercial banks play in the creation of money. Assume that, initially, the central bank of an economy puts $5,000 into circulation and commercial banks want to hold reserves of 20 percent of deposits. Further assume that the public holds no currency. Show and discuss the consolidated balance sheets of the economy’s commercial banks for each of the following instances.
Response Parameters
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