What does the phrase multiple deposit creation mean

Reference no: EM131304102

1. Suppose that PNC Bank sells $1 million in Treasury bills to the Fed and then makes a $1 million loan to David's Donut Emporium and Boat Repair. Use a T-account to show the results of these transactions on PNC's balance sheet.

2. What does the phrase "multiple deposit creation" mean?

3. What is the simple deposit multiplier? If the required reserve ratio is 15%, what is the value of the simple deposit multiplier?

Reference no: EM131304102

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What does the phrase multiple deposit creation mean : Suppose that PNC Bank sells $1 million in Treasury bills to the Fed and then makes a $1 million loan to David's Donut Emporium and Boat Repair. Use a T-account to show the results of these transactions on PNC's balance sheet.

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