Suppose that you are in an economy with reserve requirements are equal to 15%, and cash drain is equal to 7%. This economy currently has $4,000 total banking deposits in the banking system. All of the banks have zero capital. If the Central Bank lowers the reserve requirements from 15% tp 9%, then what will be the increase in the quantity of total bank deposits in the banking system? Note: round all answers to two decimal places. Do not include currency signs in your answer.
Suppose that you are in an economy with reserve requirements are equal to 15%, and cash drain is equal to 7%. This economy currently has $4,000 total banking deposits in the banking system. All of the banks have zero capital. If the Central Bank lowers the reserve requirements from 15% tp 9%, then what will be the increase in the quantity of total bank deposits in the banking system? Note: round all answers to two decimal places. Do not include currency signs in your answer.
Chapter25: Money, Banking, And The Federal Reserve System
Section: Chapter Questions
Problem 13P
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