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Banking system using the simple deposit multiplier

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Reference no: EM131049300

Suppose the reserve requirement is 4%. If the Fed buys $1 million in bonds from the First National Bank, what is the total deposit creation in the banking system using the simple deposit multiplier? Using the information above, except current ratio is 33%, with excess reserve is 1%, what is the change in money supply?

Reference no: EM131049300

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