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The following is information about a banking system (all figures are in $millions): Target reserve ratio 10 percent New cash deposits into the whole system
The following is information about a banking system (all figures are in $millions): Target reserve ratio 10 percent New cash deposits into the whole system $20 Excess reserves before the above deposits 0 Refer to the above information to answer this question. What will the $20 of new deposits into chequing accounts initially create? $18 of new demand deposits. $100 of new demand deposits. $18 of excess reserves. Excess reserves of $20
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