A central bank cut the reserve ratio by 50 basis points to 8.9%. Suppose the initial...

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A central bank cut the reserve ratio by 50 basis points to 8.9%. Suppose the initial deposit to be $1,000. What is the money supply generated from $1000 initial deposit under the new reserve ratio? Does the central bank tighten or loosen monetary policy? A central bank cut the reserve ratio by 50 basis points to 8.9%. Suppose the initial deposit to be $1,000. What is the money supply generated from $1000 initial deposit under the new reserve ratio? Does the central bank tighten or loosen monetary policy?

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