Problem
• Explain how the banking system creates money.
• Demonstrate how the banking system creates money by creating a table similar to the one given in McEachern's (10e) Exhibit 8 on page 622 in the chapter 28 named Banking and the Money Supply.
Choose a reserve requirement from 1 to 20 percent for your table, but DO NOT use 10 percent. Also, assume the Fed purchases a $1,000 bond from "Your Bank," which will be the name of the bank shown in the first round of your version of Exhibit 8.
• Given the reserve requirement that you selected, what would the money multiplier be equal to?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.