Homework - billion If the bank has to hold on to 12.5 it...

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Homework #10 Test Yourself 1. One half of 120 billion is 60 billion so that is the number that will be used 60000000000 is put into a bank, and the bank has to hold on to 10% of it. They keep 6 billion in reserves and they lend out 54 billion, if the next person puts that in the bank the bank lends out 48.6 billion and are required to reserve 5.4
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Unformatted text preview: billion, If the bank has to hold on to 12.5% it decreases the money supply. 60 billion, into the bank, 52.5 billion is lent out as opposed to 54 billion For 16.33% only 50.196 gets lent out, decreasing the money supply further....
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This note was uploaded on 04/17/2008 for the course ECO 101 taught by Professor Cote during the Spring '08 term at University of Maine Orono .

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