How does this affect the simple money multiplier

Reference no: EM133437058

Question: Suppose that the Federal Reserve lowers the required reserve ratio from 0.10 to 0.05. How does this affect the simple money multiplier? By how much would the money supply change if there was an increase in fresh reserves of $100,000? (Note: Calculate the change in the money supply at both levels of the required reserve ratio given, and then find the difference)

Reference no: EM133437058

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