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1. If the supply of new reserves in banks is 100 million, the reserve requirement is .1 (10%), and the banks are fully lent out,
1. If the supply of new reserves in banks is 100 million, the reserve requirement is .1 (10%), and the banks are fully lent out, what is the total amount of loans? What is the total new money supply?
2.Same question, 100 million in new reserves, but now there is a reserve requirement of 20%. How many loans? How much new money supply?
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