Give the formula for the simple deposit multiplier. If the required reserve ratio is 20 percent, what
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Give the formula for the simple deposit multiplier. If the required reserve ratio is 20 percent, what is the maximum increase in checking account deposits that will result from an increase in bank reserves of $20,000? Is this maximum increase likely to occur? Briefly explain.
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The simple deposit multiplier is where RR is the required reserve ratio The maximum inc...View the full answer
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