Question of monetary multiplier

Reference no: EM1371073

The question asked that suppose that the legally required ratio of reserves to deposits is 1/10. If $100 million in excess reserves are made available to the banking system, by how much can the banking system increase the money supply? What is the answer if the legally required ratio of reserves to deposits is 1/6 rather than 1/10?

Reference no: EM1371073

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