if the entire amount of excess reserves were loaned out, what would happen to Money supply? Now suppose the required reserve ratio was raised to 40%, and assume all excess reserves are lent out, what is the maximum amount of money the banking system could lend? Using the same situation, suppose now that an entity, bought $1 T worth of bonds from the banking system. What is your answer to “c”?

if the entire amount of excess reserves were loaned out, what would happen to Money supply? Now suppose the required reserve ratio was raised to 40%, and assume all excess reserves are lent out, what is the maximum amount of money the banking system could lend? Using the same situation, suppose now that an entity, bought $1 T worth of bonds from the banking system. What is your answer to “c”?

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter14: Money And Banking

Section14.3: Types Of Money In The United States

Problem 1R

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