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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

Explain how a decrease in the required reserve ratio increases the money supply.

To determine

The change in money supply.

Explanation

Required ratio is the proportion of money that the banks should keep as reserves. When the required ratio decreases, it implies that the loanable capacity of the bank increases...

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