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Assume the following information for the entire banking system: Required Reserves Ratio =20% Actual Reserves =220b Currency held outside of the banking system = 1,200

Assume the following information for the entire banking system: Required Reserves Ratio =20% Actual Reserves =220b Currency held outside of the banking system = 1,200 Deposits = 1,000b If banks decide to hold ONLY required reserves, after all rounds of the multiplier and assuming there is no currency leak, Loans will increase by 100b increase by 1,000b increase by 1,100b None of these answers is correct increase by 20b

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