The balance sheet below shows the effect of a new 3,400 deposit in Bank A. Assume that the commercial banks have establi

[answerhappygod]

The balance sheet below shows the effect of a new 3,400 deposit
in Bank A. Assume that the commercial banks have established a 7
percent desired reserve and that no bank holds excess reserves.
BANK A
Assets
Liabilities
Reserves 3,400
Deposits 3,400
Loans 0
Assume that Bank A lends its excess reserves to Mr. Jones who
spends the proceeds of the loan. Show Bank A's new balance
sheet
BANK A
Assets
Liabilities
Reserves
Deposits
Loans
The money Mr. Jones borrows is deposited in Bank B. Bank B lends
its excess reserves to Mr. Smith. Show Bank B's balance sheet after
the loan has been made out.
BANK B
Assets
Liabilities
Reserves
Deposits
Loans
The money Mr. Smith borrows is deposited in Bank C. Bank C lends
its excess reserves to Mr. Black. Show Bank C's balance sheet after
the loan has been made out.
BANK C
Assets
Liabilities
Reserves
Deposits
Loans
The money Mr. Black borrows is deposited in Bank D. Bank D lends
its excess reserves to Mr. Green. Show Bank D's balance sheet after
the loan has been made out.
BANK D
Assets
Liabilities
Reserves
Deposits
Loans
If the above process continues to completion, the following
totals will exist for the banking system:
Part 7: Deposits
Part 8: Reserves
Part 9: Loans