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.

Answer rating: 100% (QA)

Given the information Bank A receives a deposit of 100 The required reserve ratio RRR ... View the full answer