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Business, 25.02.2020 00:06 Farhan54019

While Jon is walking to school one morning, a helicopter flying overhead drops a $100 bill. Not knowing how to return it, Jon keeps the money and deposits it in his bank. (No one in this economy holds currency.) If the bank keeps 5 percent of its money in reserves: Instructions: Enter your responses as whole numbers. a. How much money can the bank initially lend out? $ b. After these two initial transactions, by how much is the money in the economy changed? $ c. What’s the money multiplier? d. How much money will eventually be created by the banking system from Jon’s $100? $

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