Assume that Bank A receives a deposit of $100 and that the central bank requires all commercial
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Assume that Bank A receives a deposit of $100 and that the central bank requires all commercial banks to keep 15% of their total deposits on reserve (the required reserve ratio [RRR] is 0.15). How can this deposit lead to the creation of new money throughout the economy? Calculate how much money can be created out these 100 dollars and input the result of your calculations below.
Related Book For
Financial Accounting For Management
ISBN: 9789385965661
4th Edition
Authors: Neelakantan Ramachandran, Ram Kumar Kakani
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