uppose the entire banking system has $50 million in excess reserves and a required reserve ratio of 10 percent. The deposit-crea

Question

Aleksandr [31]

3 years ago

9

uppose the entire banking system has $50 million in excess reserves and a required reserve ratio of 10 percent. The deposit-crea

tion potential of the banking system is:

Social Studies

1 answer:

Svetllana [295] · Answer 1 · 2022-08-17T02:14:56+03:00

Svetllana [295]3 years ago

7 0

Answer: The deposit-creation potential of the banking system is $500 million.

Explanation: To solve: take the money that the banking system has in excess reserves $50 million and multiply it by the reserve ratio of 10%. $50,000,000 x 10 = $500,000,000