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Calculate the money multiplier

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Reference no: EM131043267

If the Federal Reserve sets a 15% required reserve ratio and the total demand deposits of member banks are $220 billion,

a) How much must the banks hold as required reserves?

b) Calculate the money multiplier. If banks presently hold $55 billion in reserves,

c) What are the banks' excess reserves?

d) Calculate the potential money supply increase.

Reference no: EM131043267

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