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Working with the money multiplier
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Can you name the number or dollar amount?
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$500 is deposited in a bank. Given this and the required reserve ration, answer the following questions.
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1%
How much of this must the bank hold in reserves?
How much of this can the bank loan out?
What is the money multiplier?
What is the maximum increase in the money supply?
5%
How much of this must the bank hold in reserves?
How much of this can the bank loan out?
What is the money multiplier?
What is the maximum increase in the money supply?
10%
How much of this must the bank hold in reserves?
How much of this can the bank loan out?
What is the money multiplier?
What is the maximum increase in the money supply?
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