Question

The SIMPLEX financial system is characterized by a required reserves ratio of 11 percent; initial excess reserves are $1 million; and there are no currency or other leakages.
a. What would be the maximum amount of checkable deposits after deposit expansion and what would be the money multiplier?
b. How would your answer in (a) change if the reserve requirement had been 9 percent?


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  • CreatedMarch 27, 2015
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