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You just deposited $4,000 in cash in a checking account at the local bank. Assume that banks lend out all excess reserves and that there are no leaks in the banking system. That is, all money lent by banks gets deposited in the banking system. Round your answers to the nearest dollar.
If the reserve requirement is 18%, how much will your deposit increase the total value of checkable bank deposits?
$ _______
If the reserve requirement is 7%, how much will your deposit increase the total value of checkable deposits?
$___________
Decreasing the reserve requirement increases/Decreases the money supply.
Sagot :
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