Suppose the commercial banking system has received a new deposit of $200 million. With a required reserves ratio of 20%, what is the maximum amount of money this banking system could create due to this deposit?
Suppose the commercial banking system has received a new deposit of $200 million. With a required reserves ratio of 20%, what is the maximum amount of money this banking system could create due to this deposit?
Chapter15: Money Creation
Section: Chapter Questions
Problem 19SQ
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Suppose the commercial banking system has received a new deposit of $200 million. With a required reserves ratio of 20%, what is the maximum amount of money this banking system could create due to this deposit?
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