Suppose that you find $100 dollars and you deposit it into your bank account as a checkable deposit. If the require reserve ratio is 20%, how much will the money supply increase due to the initial $100 deposit in the banking system.

Macroeconomics
13th Edition
ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter13: The Federal Reserve System
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Suppose that you find $100 dollars and you deposit it into your bank account as a checkable deposit. If the require reserve
ratio is 20%, how much will the money supply increase due to the initial $100 deposit in the banking system.
Transcribed Image Text:Suppose that you find $100 dollars and you deposit it into your bank account as a checkable deposit. If the require reserve ratio is 20%, how much will the money supply increase due to the initial $100 deposit in the banking system.
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