|Question||Redo the example of Gorgonzola in the text (refer to Tables 20.3 to 20.7), assuming that (1) initially, the Gorgonzolan central bank puts 5,000,000 guilders into circulation (instead of the 1,000,000 guilders used in the example) and (2) commercial banks desire to hold reserves of 20 percent of deposits (instead of the 10 percent used in the original example). As in the text, assume that the public holds no currency. Show the consolidated balance sheets of Gorgonzolan commercial banks for each of the following instances. (LOS)
a. After the initial deposits (compare to Table 20.3).
b. After one round of loans (compare to Table 20.4).
c. After the first deposit of guilders (compare to Table 20.5).
d. After two rounds of loans and redeposits (compare to Table 20.6).
e. What are the final values of bank reserves, loans, deposits, and the money supply?