Answered

IDNLearn.com: Your go-to resource for finding precise and accurate answers. Discover thorough and trustworthy answers from our community of knowledgeable professionals, tailored to meet your specific needs.

Assume that the required reserve ratio is 10 percent, banks keep no excess reserves and borrowers deposit all loans made by banks. Suppose you have saved $100 in cash at home and decide to deposit in your checking account. As a result of your deposit, the money supply can increase by a maximum of Group of answer choices

Sagot :

Answer:

$1,000

Explanation:

The computation of the increase in the money supply is shown below:

But before that the multiplier is

= 1 ÷ required reserve ratio

= 1 ÷ 0.10

= 10

Now the increase in the money supply is

= Multiplier × saving in cash at home

= 10 × $100

= $1,000

hence, the above represent the answer and the same would be relevant

Your presence in our community is highly appreciated. Keep sharing your insights and solutions. Together, we can build a rich and valuable knowledge resource for everyone. IDNLearn.com provides the best answers to your questions. Thank you for visiting, and come back soon for more helpful information.