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Posted on Jul 11, 2024

If the reserve requirement for demand deposits is 10% what is the maximum change in the money supply that the banking system can create if:

a. the Federal Reserve/ Central Bank puts $1,000,000 of new reserves in the banking system

b. $1,000,000 in cash is deposited in checking accounts

c. Toyota borrows $1,000,000 from an insurance company

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