What are IBFs? Why do you think they were legalized? First Bank has cash reserves of $200,000, loans of $800,000, and deposits of $1,000,000. a. Prepare a balance sheet for the bank. b. If the bank...

What are IBFs? Why do you think they were legalized? First Bank has cash reserves of $200,000, loans of $800,000, and deposits of $1,000,000. a. Prepare a balance sheet for the bank. b. If the bank maintains a reserve requirement of 15 percent, what is the largest loan it can make? c. What is the maximum amount by which the money supply can be increased as a result of First Bank’s new loan? d. If the reserve requirement is reduced to 12 percent, how much larger of a loan can the bank make? How much more can the money supply be increased?