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In this assignment, you will apply your knowledge of how banks create money. Relevant knowledge is important because money creation affects all aspects of the

In this assignment, you will apply your knowledge of how banks create money. Relevant knowledge is important because money creation affects all aspects of the economy and is fundamental for the functioning of society.

Suppose that the required reserve ratio is 10 percent and you withdraw $25,000 from Comerica Bank.

What is the deposit multiplier?
What is the total decrease in deposits in the banking system?
What is the change in the money supply?

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