Suppose that a consumer has a marginal propensity to consume of 0.7. If this consumer earns an extra $2, her consumption spendin
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Answer:
The change in checking deposit is equal to $22,727.27.
Explanation:
An amount of $2,500 is deposited in a checking account.
The required reserve ratio is 0.11 or 11%.
A part of this deposit will go to the required reserve and the rest will be added in the checking deposit of the bank.
The change in the checking deposits will be
= amount deposited
=
= $22,727.27