Question

Reagan deposited $1,000 into Regions Bank. If the Reserve Requirement is 10%, how much “new” money has been created due to Reagan’s deposit?
Government please help me

Answer 1

According to the information, it can be inferred that the new money created is equivalent to $9,000.

How to calculate the money that has been created during Reagan's deposit?

To calculate the new money that has been created during the Reagan deposit we must perform the following mathematical procedure:

We multiply the deposit amount by 0.1

• 1,000 × 0.1 = 100

We subtract the result from the amount of money on the deposit.

• 1,000 - 100 = 900

We calculate the money multiplier.

• 1 ÷ 0.1 = 10

Finally, we multiply the money value by the multiplier value.

• 900 × 10 = 9,000

Based on the above, $9,000 is to be created with Reagan's deposit.

Learn more about bank deposit in: brainly.com/question/2507231

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