Question
A bank has excess reserves of $1,000,000 and makes a new loan for $500,000. If the bank faces a 10 percent required reserve ratio, by
A bank has excess reserves of $1,000,000 and makes a new loan for $500,000. If the bank faces a 10 percent required reserve ratio, by how much will the money supply increase when the loan is made?
$1,500,000
$0
$5,000,000
$2,000,000
$50,000
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Economics Today
Authors: Roger LeRoy Miller
16th edition
132554615, 978-0132554619
