If reserves in the banking system increase by $1 billion because the Fed lends $1 billion to
Question:
If reserves in the banking system increase by $1 billion because the Fed lends $1 billion to financial institutions, and checkable deposits increase by $9 billion, why isn’t the banking system in equilibrium? What will continue to happen in the banking system until equilibrium is reached? Show the T-account for the banking system in equilibrium.
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The banking system is still not in equilibrium because ...View the full answer
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Related Book For 
Economics of Money Banking and Financial Markets
ISBN: 978-0134733821
12th edition
Authors: Frederic S. Mishkin
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