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Business, 13.07.2020 17:01 cadeduncan71

Assume that the banking system has total reserves of $150 billion. Assume also that required reserves are 8 percent of checking deposits and that banks hold no excess reserves and households hold no currency. The money multiplier is . The money supply is billion. Suppose the Fed raises required reserves to 12.5 percent of deposits. The new money multiplier is , and the money supply to billion.

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Assume that the banking system has total reserves of $150 billion. Assume also that required reserve...
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