Suppose that in a given month $52 million is deposited into the banking system while $60 million is withdrawn. Also suppose that the Fed has set the reserve requirement at 8 percent and that banks have no excess reserves at the beginning of the month. What is the maximum amount of new checkable-deposit money that can be created (or removed) by the banking system as a result of these deposits and withdrawals? Instructions: Enter your answer as a whole number. Enter a positive number to show an increase and a negative number (−) to show a decrease. $ million
Suppose that in a given month $52 million is deposited into the banking system while $60 million is withdrawn. Also suppose that the Fed has set the reserve requirement at 8 percent and that banks have no excess reserves at the beginning of the month. What is the maximum amount of new checkable-deposit money that can be created (or removed) by the banking system as a result of these deposits and withdrawals? Instructions: Enter your answer as a whole number. Enter a positive number to show an increase and a negative number (−) to show a decrease. $ million
Chapter19: Money Creation
Section: Chapter Questions
Problem 15SQ
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Suppose that in a given month $52 million is deposited into the banking system while $60 million is withdrawn. Also suppose that the Fed has set the reserve requirement at 8 percent and that banks have no
Instructions: Enter your answer as a whole number. Enter a positive number to show an increase and a negative number (−) to show a decrease.
$ million
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