Total reserves: $ 90 billion Transactions deposits: $ 750 billion Cash held by public: $ 400 billion Required reserve ratio: 0.10 How large would the money supply be if the banks fully utilized their lending capacity?
Total reserves: $ 90 billion Transactions deposits: $ 750 billion Cash held by public: $ 400 billion Required reserve ratio: 0.10 How large would the money supply be if the banks fully utilized their lending capacity?
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter12: Money, Banking And The Financial System
Section12.3: How Banking Developed
Problem 3ST
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Question
Total reserves: | $ 90 billion |
---|---|
Transactions deposits: | $ 750 billion |
Cash held by public: | $ 400 billion |
0.10 |
How large would the money supply be if the banks fully utilized their lending capacity?
Expert Solution
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Money supply is the stock of money in the economy in particular period of time.
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