caitlin9419 caitlin9419

02-01-2020
Business

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Suppose a banking system has a required reserve ratio of 0.15. How much can the money supply increase in response to a $1 billion increase in excess reserves for the whole banking system?

Respuesta :

Karabo99 Karabo99

06-01-2020

Answer:

the money supply increase in response to a $1 billion increase in excess reserves for the whole banking system is $6.67billion.

Explanation:

Increase in money supply = 1/0.15

Increase in money supply = $6.67 billion

Therefore, the money supply increase in response to a $1 billion increase in excess reserves for the whole banking system is $6.67billion.

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