What is the initial change in the excess reserves in the depositor's bank in the following case: http://postimage.org/image/j6hc3mj3z/
When clients deposit funds in a bank it increases the reserves of the bank. The funds deposited are used by the bank in its lending operations to other clients that borrow money from the bank. Banks are usually allowed to lend an amount greater than the total amount deposited with...
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