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Need help with the bottom 1-4. Excess Reserve for #1 is 0. #2 is 10,000. #3 is 28,000. #4 is 0.
I. Depositors Money: 150.000 Banks Money: 0 Reserve Req. Ratio: 10% What is the: Actual Reserve Required Reserve Excess Reser
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Answer #1

New money created = Excess reserve * Money multiplier

Money multiplier = 1/ Reserve ratio

1.

Excess reserve = 0

Money multiplier = 1/10% = 10

New Money = Nil

2.

Excess reserve = 10000

Money multiplier = 1/15% = 6.6667

New Money = 10000 * 6.66667 = 66667

3.

Excess reserve = 28000

Money multiplier = 1/20% = 5

New Money = 28000 * 5 = 140000

4.

Excess reserve = 0

Money multiplier = 1/100% = 1

New Money = Nil

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