What is the money multiplier

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The reserve ratio of country Alpha is 12%. John makes a bank deposit $200 in Bank Gamma

1) Show how the bank reserves, bank deposits and amount of loans in the economy will change after 4 rounds of loans are given out by Bank Gamma

2) What is the money multiplier?

3) By how much will the money supply change in the economy?

Reference no: EM132606897

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