A bank has Rs. 5 million in cash. The minimum reserve ratio is 20 %. What is maximum potential increases in total deposits ?
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Answer:
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0
Answer:
Deposits = 4 million
Step-by-step explanation:
Minimum Reserve ratio = 20 %
Bank cash = Rs. 5 million
total cash before deposits = 5million * 20% = 1 million
change in cash after deposits = deposits = 5million - 1 million = 4 million
Deposits = 4 million
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