The act of providing a loan by the banker to the borrower amounting to $800 after setting aside the reserve amount of $200 contributes to the increase of the money supply by $800.
<h3>What is the money supply?</h3>
The money supply is the amount that a public held at a point in time including currency notes, coins, and the bank account balances.
When the banker is giving the loan to the borrower at $800 then it infuses the money into the economy as this amount is further given as a loan by another bank to another borrower. This whole cycle goes on to continue till the amount reaches zero.
Therefore, the money supply increases by $800 when the banker gives loans to the borrower for the amount of $800.
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Answer:
it might be B but I'm not sure
Answer:
$14,250
Explanation:
To determine what amount of money will make Fred take his chances and invest in this new business, we first have to solve this equation:
- current wealth - (% chance of losing money x wealth after losing money)
$12,000 - (20% x $3,000) = $12,000 - $600 = $11,400
Then:
$11,400 / 80% of getting wealthier = $14,250
TRUE
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