Suppose again that checkable deposits started off at $300,000 in First Main Street Bank, the required reserve ratio is 10%, with no excess reserves and no cash leakage. First Main Street Bank takes the entire $3,000 in excess reserves that resulted from the open-market purchase by the Fed and creates a loan for Gilberto in a form of a new checkable deposit with a balance of $3,000. The money supply now is $_____.
Suppose again that checkable deposits started off at $300,000 in First Main Street Bank, the required reserve ratio is 10%, with no excess reserves and no cash leakage. First Main Street Bank takes the entire $3,000 in excess reserves that resulted from the open-market purchase by the Fed and creates a loan for Gilberto in a form of a new checkable deposit with a balance of $3,000. The money supply now is $_____.
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter13: The Federal Reserve System
Section: Chapter Questions
Problem 10WNG
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Suppose again that checkable deposits started off at $300,000 in First Main Street Bank, the required reserve ratio is 10%, with no excess reserves and no cash leakage.
First Main Street Bank takes the entire $3,000 in excess reserves that resulted from the open-market purchase by the Fed and creates a loan for Gilberto in a form of a new checkable deposit with a balance of $3,000.
The money supply now is $_____.
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