User talk:The BvOyS/sandbox

Assuming that there are five commercial banks as well as eight individuals are used in the creation of money respectively, namely Standard Bank, First National Bank, Capitec bank, Netbank and ABSA Bank, and individuals A, B, C, D, E, F ,G and H. Suppose individual “A” deposits R50000 with the Standard Bank and legal reserve ratio is 30%. Standard Bank’s cash reserves increases by R50000 and in exchange it creates a demand/checkable deposits of R50000 in favour of “A” (in this case there is no increase in money supply in the economy) and the remaining amount is available to advance loans.

a)	Prepare the journal account of Capitec banks and Standard bank? b)	How much money can be created by Netbank Bank?