problem 4,.
If the fed buys $1 million of bonds from the first national bank, but an additional 10%of any deposit is held as
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Answered by
0
Answer:
Required Reserve Ratio = 10%
Excess Reserve Ratio = 10%
Total Reserve Ratio = 10% + 10% = 20%
Simple money multiplier = (1 / total reserve ratio) * 100
(1 / 0.2) * 100
5
Total increase in Checkable Deposits = $1 million * 5 = $5 million
Answered by
1
Explanation:
Total Reserve Ratio = 10% + 10% = 20%
Simple money multiplier = (1 / total reserve ratio) * 100
= (1 / 0.2) * 100
= 5
Total increase in Checkable Deposits = $1 million * 5 = $5 million
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