Determine how much does the money supply increase

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Reference no: EM13241555

The Bank of Turlock has $30,000 in reserves, $100,000 in demand deposits and the reserve requirement is 15%. How much can this bank lend out? How much does the money supply increase when it makes that loan?

The equations given to me were:
RR = rr x DD
ER = AR - RR
mm = 1/rr
DMS = mm x change in ER

Reference no: EM13241555

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