By how much could the banks increase the lending activities

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Reference no: EM13231431

Assume the following data describe the condition of the banking system:

Total reserve $200 billion
Transactions deposits $800 billion
Cash held by pubic $100 billion
Reserve Requirement 0.20

How large is the MI money supply? How large are required reserve? How large are excess reserve? By how much could the banks increase their lending activities? What will be the total effect on the M3 money supply?

Reference no: EM13231431

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