Answered

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Suppose a commercial banking system has $ 100,000 of outstanding checkable deposits and actual reserves of 40,000. If the reserve ratio is 0.4%, the banking system can expand the supply of money by a maximum of $ ____. (Put only numbers in your answer; do not put comma in your answer.)

Sagot :

Answer:

the moeny supply expand is $9,900,000

Explanation:

The computation is shown below:

Excess reserves is

= Actual - required

= $40,000 - (0.4% × $100000)

= $40,000 - $400

= $39,600

Now Money supply expand is

= $39,600 ÷ 0.4%

=$9,900,000

hence, the moeny supply expand is $9,900,000

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