Suppose the required reserve ratio is equal to 2.75%, and a customer deposited $200 into a...
Suppose the required reserve ratio is equal to 2.75%, and a customer deposited $200 into a checking account at Bank of America. What is the maximum amount of money Bank of America can create out of the initial amount of $200?
| A. |
$7272.73 |
|
| B. |
$72.73 |
|
| C. |
$667.67 |
|
| D. |
$8787.87 |
|
| E. |
$205.5 |
Homework Answers
Answer option A) 7272.73
As multilplier m = 1/RRR
= 1/.0275
so Maximum amount created = m*200
= 200/.0275
= 7272.73
Add Answer to:
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