Suppose that Andrew makes a new cash deposit of $120,000 at his bank. Suppose that the bank is required only to keep new cash reserves equal to 20%. Then the maximum amount Andrew's deposit will money supply is $ the Which of the following assumptions must hold to ensure that the money creation process initiated by Andrew's deposit reaches its potential? Check all that apply. All banks in the banking system lend all of their excess reserves. Some borrowers wait a few months before they begin to spend the borrowed funds. All borrowers quickly spend all of their newly acquired funds. The desired reserve ratio exceeds 5%.

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