What is approximate potential increase in money supply

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1. Suppose Jon finds $100 in the pocket of his jacket and deposits the oneyinto the checking account. The bank must hold 6% of this depoit as required reserves. What is the approximate potential increase in the money supply because of this deposit?

2. Suppose the entiresystem has required reserve ratio of 8%. How much can the money supply increase in response to a $2 billion increase in excess reserve for the whole banking system?

Reference no: EM131379921

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