How will the money supply be affected by the transaction

Reference no: EM13224856

suppose that Mr Rich withdraws $ 5 Million from his transactions account at the bank of america and holds the money . Assume a reserve requirement of 25 purcent and no excess reserves in the banking system prior to this withdrawal . How will the money supply be affected by this transaction ? what is the ultimate change in deposits, loans, and reserves in the banking system?

Reference no: EM13224856

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