How to do this problem? Answer included

Economics
Tutor: None Selected Time limit: 1 Day

Aug 12th, 2014

If the Bank's reserve ratio is 25%, this means that the banks will hold 25% of the deposits in their vaults. i.e 25% of $200 million = $50 million. as a result, the cash balances in the economy will increase to $550 million pushing the money supply in the economy upwards. Additionally, this could increase further if the banks generated loans through the deposits that they receive as this helps them lend even what they do not have.

Aug 13th, 2014

Studypool's Notebank makes it easy to buy and sell old notes, study guides, reviews, etc.
Click to visit
The Notebank
...
Aug 12th, 2014
...
Aug 12th, 2014
May 27th, 2017
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer