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For questions 18 and 19, imagine we are observing an economy where initially the money supply is made up of 500 $1 bills. 18. Suppose

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For questions 18 and 19, imagine we are observing an economy where initially the money supply is made up of 500 $1 bills. 18. Suppose that people deposit the entire $500 into their checking accounts. Further suppose that banks now have a required reserve ratio of 10%. How large could the money supply become now? 19. How much money did the banks "create" in question 18? 20. Describe how money is created through the banking system

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