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Business, 20.03.2020 09:49 nicayakhalia

Consider a country where all money is currently held as cash and the money supply has a value of $2,000. A banking system is developed, and the residents of the country deposit the $2,000 of cash into the banking system and decide they no longer want to hold any cash. If the reserve ratio is equal to 10%, then the banking system has the ability to create $ of new money and the money supply in the economy will be equal to $ .

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