Assuming that the following data describe the condition of the banking system: Total Reserves: $90 billion Transactions deposits: $900 billion Cash held by public: $100 billion Given the reserve ratio, how large would the money supply be if the banks fully utilized their lending capacity?
Assuming that the following data describe the condition of the banking system: Total Reserves: $90 billion Transactions deposits: $900 billion Cash held by public: $100 billion Given the reserve ratio, how large would the money supply be if the banks fully utilized their lending capacity?
Chapter25: Money Creation
Section: Chapter Questions
Problem 9SQP
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Assuming that the following data describe the condition of the banking system:
Total Reserves: $90 billion
Transactions deposits: $900 billion
Cash held by public: $100 billion
Given the reserve ratio, how large would the money supply be if the banks fully utilized their lending capacity?
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