Suppose the Central Bank of a country decides to increase the reserve requirement ratio for commercial banks from 10% to 15%. If the total deposits in the banking system are $1 trillion and the currency-to-deposit ratio is 0.2, what will be the impact of this policy on the money supply? Show all your calculations.

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The detailed answer for the above question is provided below Given information Reserve requirement ratio RRR 10 to 15 Total deposits in the banking sy... View the full answer