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Bank reserves increase by $5,000 when the RRR is 15%. The banks initially hold an additional 1% as excess reserves but then lend out all
Bank reserves increase by $5,000 when the RRR is 15%. The banks initially hold an additional 1% as excess reserves but then lend out all excess reserves so that the actual reserves are equal to the required reserves. By how much does the money supply increase when the banks change from 1% to 0% excess reserves?
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