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    question of monetary multiplier

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    The question asked that suppose that the legally required ratio of reserves to deposits is 1/10. If $100 million in excess reserves aremade available to the banking system, by how much can the banking system increase the money supply? What is the answer if the legally required ratio of reserves to deposits is 1/6 rather than 1/10?

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    https://brainmass.com/economics/banking/question-monetary-multiplier-61826

    Solution Preview

    This is a question of monetary multiplier:
    multiplier = 1/required reserve ratio = ...

    Solution Summary

    A question of monetary multiplier is assessed in the solution.

    $2.19