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The following facts describe the banking system:
Banks hold no excess reserves
Desired reserve ratio for all banks is 8.0 %
There is a currency drain of 2.3 %
Problem 1: Based on the information provided, if a commercial bank received a deposit of $ 108 , how much new deposits would the entire system of commercial banks eventually create?
a. 1112.40
b. 1048.54
c. 10800.00
d. None of the answers offered are accurate.
e. 1153.40
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