Initially, the banking system has a required reserve ratio of 20.0 percent, $450,000 in total deposits, and no excess reserves. If the Fed reduces the required reserve ratio to 15.0, how much unused lending capacity does the banking system now have? Multiple Choice $750,000 $3,000,000 $337,500 $150,000
Initially, the banking system has a required reserve ratio of 20.0 percent, $450,000 in total deposits, and no excess reserves. If the Fed reduces the required reserve ratio to 15.0, how much unused lending capacity does the banking system now have? Multiple Choice $750,000 $3,000,000 $337,500 $150,000
Chapter15: Money Creation
Section: Chapter Questions
Problem 8SQ
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Transcribed Image Text:Initially, the banking system has a required reserve ratio of 20.0 percent, $450,000 in total deposits, and no excess
reserves. If the Fed reduces the required reserve ratio to 15.0, how much unused lending capacity does the banking
system now have?
Multiple Choice
$750,000
$3,000,000
$337,500
$150,000
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