If banks have a required reserve ratio of 20%, and one bank is currently holding $8,000 in excess reserves, what would be the maximum possible change to the money supply if the bank loans out all of the excess reserves? Group of answer choices $0 $40,000 $16,000 $56,000 $32,000
If banks have a required reserve ratio of 20%, and one bank is currently holding $8,000 in excess reserves, what would be the maximum possible change to the money supply if the bank loans out all of the excess reserves? Group of answer choices $0 $40,000 $16,000 $56,000 $32,000
Chapter25: Money Creation
Section: Chapter Questions
Problem 9SQP
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If banks have a required reserve ratio of 20%, and one bank is currently holding $8,000 in excess reserves , what would be the maximum possible change to the money supply if the bank loans out all of the excess reserves? Group of answer choices $0 $40,000 $16,000 $56,000 $32,000
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