If banks have a required reserve ratio of 25%, and one bank is currently holding $10,000 in excess reserves, what would be the maximum possible change to the money supply if the bank loans out all of the excess reserves?
If banks have a required reserve ratio of 25%, and one bank is currently holding $10,000 in excess reserves, what would be the maximum possible change to the money supply if the bank loans out all of the excess reserves?
Chapter25: Money Creation
Section: Chapter Questions
Problem 9SQP
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