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Fractional reserve banking system

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The central bank of the fictitious country "Alpha" raises bank reserves by $200. What effect will the increase in bank reserves have on the money supply in each of the following situations:

a. If the banking system is a 100% reserve banking system, the money supply will increase by $ .

b. The banking system is a fractional reserve banking system with a desired reserve deposit ratio of 0.2, the money supply will increase by 

Reference no: EM132258333

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