Change eventually in the whole banking system

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Reference no: EM131159480

While Bob was walking in the park, he found a $ 100 bill. Not finding the owner, he decided to deposit it in his checking account. The banks have no excess reserves and required reserve ratio is 20 %.

How did it change M1 initially? How much money can his bank lend out initially?

How much total money supply will change eventually in the whole banking system.

Reference no: EM131159480

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