Initially, the banking system has a required reserve ratio of 30.0 percent, $150,000 in total deposits, and no excess reserves. If the Fed reduces the required reserve ratio to 25.0, how much unused lending capacity does the banking system now have? Multiple Choice $30,000 $125,000 $150,000 $900,000
Initially, the banking system has a required reserve ratio of 30.0 percent, $150,000 in total deposits, and no excess reserves. If the Fed reduces the required reserve ratio to 25.0, how much unused lending capacity does the banking system now have? Multiple Choice $30,000 $125,000 $150,000 $900,000
Chapter19: Money Creation
Section: Chapter Questions
Problem 7SQ
Question
Transcribed Image Text:Initially, the banking system has a required reserve
ratio of 30.0 percent, $150,000 in total deposits,
and no excess reserves. If the Fed reduces the
required reserve ratio to 25.0, how much unused
lending capacity does the banking system now
have? Multiple Choice $30,000 $125,000 $150,000
$900,000
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