Order the answer to: Assume that First Purity Bank…
| Question | a. What is the reserve requirement equal to? b. If the bank receives a new deposit of $1 million and the bank wants to remain fully loaned-up, how much of this new deposit will the bank loan out? c. When the new deposit to First Purity Bank works itself through the entire banking system (assume all banks keep fully loaned-up), by how much will total deposits, total loans, and total reserves increase? d. What is the potential money multiplier equal to in this case? |
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| Subject | business economics |
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