Economy, asked by Mahakdeepak, 5 months ago

You take $100 you had kept under your mattress and
deposit it in your bank account. If this $100 stays in
the banking system as reserves and if banks hold
reserves equal to 10 percent of deposits, by how
much does the total amount of deposits in the banking
system increase? By how much does the money
supply increase?

Answers

Answered by rjmalakar2002
8

Explanation:

First solve for the multiplier 1/R = 1/10%=10

10 that you use to calculate the deposit .. R means reserve

Deposit =cash deposit x reserve

100x10

=$1000

Total deposits increase $1000

Change in currency is a negative hence

Money supply = currency + deposit

= -$100 + $1000

=$900

Money supply increases by $900

Note : there’s nothing wrong with the previous solution I just added this for anyone who would require further explanation for better understanding

Answered by shreyao4o62009
3

Answer:

the answer is 900 dollars

Explanation:

mark me as brainliest if it helps you and thank me...

Attachments:
Similar questions