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Question 4 (15 points) : Explain two reasons why the central banks do not have complete control over the level of bank deposits and loans.
Question 4 (15 points): Explain two reasons why the central banks do not have complete control over the level of bank deposits and loans. If you decide to hold $150 less cash than usual and therefore deposit $150 in cash in the bank, what effect will this have on checkable deposits in the banking system? Assume the required reserve ratio is 10% and banks do not hold any excess reserves.
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