The Fed creates $100,000 in new money that is deposited in someone's checking account in a bank.

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The Fed creates $100,000 in new money that is deposited in someone's checking account in a bank. What is the maximum change in the money supply if the required reserve ratio is 5 percent, 10 percent, 20 percent?

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Macroeconomics Principles And Policy

ISBN: 9780324586213

11th Edition

Authors: William J. Baumol, Alan S. Blinder

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Question Posted: Aug 08, 2017 09:46 AM

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The Fed creates $100,000 in new money that is deposited in someone's checking account in a bank.

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Any deposit will create mulitiplier effect in the economy subject to reserve ratio Multiplier 1 Re...View the full answer

Macroeconomics Principles And Policy

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