Round Deposits Required Reserves of 20% Excess Reserves New Loans 50% of loan proceeds are held as currency in circulation by people Loan proceeds redeposited 1 $500 $100.00 $400.00 $400.00 $200.00 $200.00 2 $200 $40 $160 $160 $80 $80 3 $80 $16 $64 $64 $32 $32 4 $32 $6.40 $25.60 $25.60 $12.80 $12.80 5 $12.80 $2.56 $10.24 $10.24 $5.12 $5.12 6 $5.12 $1.02 $4.10 $4.10 $2.05 $2.05 7 $2.05 $.41 $1.64 $1.64 $.82 $.82 8 $.82 $.16 $.66 $.66 $.33 $.33 9 $.33 $.07 $.26 $.26 $.13 $.13 10 $.13 $.03 $.10 $.10 $.05 $.05 Totals $833.25 $166.65 $666.60 $666.60 $333.30 $333.30 Calculate the new money supply. Calculate the money multiplier.
Round Deposits Required Reserves of 20% Excess Reserves New Loans 50% of loan proceeds are held as currency in circulation by people Loan proceeds redeposited 1 $500 $100.00 $400.00 $400.00 $200.00 $200.00 2 $200 $40 $160 $160 $80 $80 3 $80 $16 $64 $64 $32 $32 4 $32 $6.40 $25.60 $25.60 $12.80 $12.80 5 $12.80 $2.56 $10.24 $10.24 $5.12 $5.12 6 $5.12 $1.02 $4.10 $4.10 $2.05 $2.05 7 $2.05 $.41 $1.64 $1.64 $.82 $.82 8 $.82 $.16 $.66 $.66 $.33 $.33 9 $.33 $.07 $.26 $.26 $.13 $.13 10 $.13 $.03 $.10 $.10 $.05 $.05 Totals $833.25 $166.65 $666.60 $666.60 $333.30 $333.30 Calculate the new money supply. Calculate the money multiplier.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Round |
Deposits |
|
Excess Reserves |
New Loans |
50% of loan proceeds are held as currency in circulation by people |
Loan proceeds redeposited |
1 |
$500 |
$100.00 |
$400.00 |
$400.00 |
$200.00 |
$200.00 |
2 |
$200 |
$40 |
$160 |
$160 |
$80 |
$80 |
3 |
$80 |
$16 |
$64 |
$64 |
$32 |
$32 |
4 |
$32 |
$6.40 |
$25.60 |
$25.60 |
$12.80 |
$12.80 |
5 |
$12.80 |
$2.56 |
$10.24 |
$10.24 |
$5.12 |
$5.12 |
6 |
$5.12 |
$1.02 |
$4.10 |
$4.10 |
$2.05 |
$2.05 |
7 |
$2.05 |
$.41 |
$1.64 |
$1.64 |
$.82 |
$.82 |
8 |
$.82 |
$.16 |
$.66 |
$.66 |
$.33 |
$.33 |
9 |
$.33 |
$.07 |
$.26 |
$.26 |
$.13 |
$.13 |
10 |
$.13 |
$.03 |
$.10 |
$.10 |
$.05 |
$.05 |
Totals |
$833.25 |
$166.65 |
$666.60 |
$666.60 |
$333.30 |
$333.30 |
- Calculate the new money supply.
- Calculate the money multiplier.
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