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

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
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
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

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....
View Full Document

Ask a homework question - tutors are online