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Read the scenario below, and then answer questions 1 and 2. Refer to this weekâ€™s readings in the text, if needed.
Scenario: Bank A has an increase in deposits (or excess reserves) of $100M and the reserve requirement is 10% with other banks not holding reserves beyond the requirement.
- How much money can Bank A create by making loans?
- How much money can the banking system as a whole create? (Show calculation).
This is due tonight 3/12
If your answer has already been received by someone else, please do not submit.
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