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?

Economics For Today
10th Edition
ISBN:9781337613040
Author:Tucker
Publisher:Tucker
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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