Suppose that the required reserve ratio is 20%. If Saanvi deposits $4,000 in cash in her checking account, and her bank lends $1 ,000 to Freda, the money supply initially: increases by $4,100. increases by $1,000. remains the same. decreases by $4,000.
1 answer:
The fact that Saanvl deposits the $4,000, means that initially , the money supply remains the same .
<h3>What happened to the money supply after Saanvl's deposit?</h3>
After Saanvl deposited, the money was simply converted from cash to cash deposits at the bank.
Both of these things are considered to be a part of money supply so there is no change in money supply initially.
Find out more on money supply at brainly.com/question/3625390
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