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    Money, Multiplier

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    Assume that the banking system has no excess reserves.

    · Find the maximum amount of check-writing deposits when bank reserves total $10,000 and the reserve requirement is (1) .10, (2) .09, and (3) .08.

    · Find the change in the reserve requirement needed to increase the maximum amount of check-writing deposits from $100,000 to $102,564 when reserves total $10,000 and the initial reserve requirement is .10.

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    https://brainmass.com/economics/banking/money-multiplier-18678

    Solution Preview

    1. The bank's reserves are 10,000
    the reserve requirement is 0.10
    Then the maximum amount of deposit is 10000/0.1=100000
    So the maximal loanable amount is ...

    Solution Summary

    The expert finds the change in the reserve requirement needed to increase the maximum amount of check-writing deposits.

    $2.19