Assume that banks lend out all their excess reserves. Currently, the total reserves that banks hold equal $32.8 billion. If the Federal Reserve decreases its reserve requirement from 8.2 percent to 8 percent, then there is potential for the whole banking system to raise the money supply by:
Assume that banks lend out all their excess reserves. Currently, the total reserves that banks hold equal $32.8 billion. If the Federal Reserve decreases its reserve requirement from 8.2 percent to 8 percent, then there is potential for the whole banking system to raise the money supply by:
Chapter13: Monetary Policy
Section: Chapter Questions
Problem 8E
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Assume that banks lend out all their excess reserves . Currently, the total reserves that banks hold equal $32.8
billion. If the Federal Reserve decreases its reserve requirement from 8.2 percent to 8 percent, then there is
potential for the whole banking system to raise the money supply by:
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