The required reserve ratio is 0.10 and individuals hold no cash. Total bank deposits are $200 million and banks hold $30 million in reserves. How much more money can the bank create if it does not hold excess reserves?
The required reserve ratio is 0.10 and individuals hold no cash. Total bank deposits are $200 million and banks hold $30 million in reserves. How much more money can the bank create if it does not hold excess reserves?
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:The required reserve ratio is 0.10 and individuals hold no cash. Total bank
deposits are $200 million and banks hold $30 million in reserves. How much
more money can the bank create if it does not hold excess reserves?
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