You take $500 that you held as currency and put it into the banking system. The reserve ratio is equal to 20%. 1. Calculate the money multiplier. 2. By how much will increase the total amount of deposits in the banking system?

You take $500 that you held as currency and put it into the banking system. The reserve ratio is equal to 20%. 1. Calculate the money multiplier. 2. By how much will increase the total amount of deposits in the banking system?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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