ECO - Suppose there is $120 million of cash and that half
Question # 00007083
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Updated on: 01/23/2014 05:10 AM Due on: 01/23/2014
Suppose there is $120 million of cash and that half of this cash is held in bank vaults as required reserves (that is, banks hold no excess reserves). How large will the money supply be if the required reserve ratio is 10%? 12.5%? 16.2/3%?
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Solution: ECO - Suppose there is $120 million of cash and that half