Assets Liabilities Reserves $ 3,825 Deposit $17,000 Loans $13,175 Total Assets $17,000 Total Liabilities $17,000 Assume that this is the balance sheet of the only bank in this economy and that the money supply is entirely kept by the bank in either a checking or a savings account. Refer to Table 1. Assume that this is the balance sheet of the only banks in this economy: Given a reserve requirement of 7 percent, what is the maximum potential increase in the money supply in the economy? O $37,642.9 O $34,000

Assets Liabilities Reserves $ 3,825 Deposit $17,000 Loans $13,175 Total Assets $17,000 Total Liabilities $17,000 Assume that this is the balance sheet of the only bank in this economy and that the money supply is entirely kept by the bank in either a checking or a savings account. Refer to Table 1. Assume that this is the balance sheet of the only banks in this economy: Given a reserve requirement of 7 percent, what is the maximum potential increase in the money supply in the economy? O $37,642.9 O $34,000

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Monetary System

Section: Chapter Questions

Problem 10PA

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