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Papessa [141]
3 years ago
14

Suppose Ginger deposits $12,000 in cash into her checking account at the Bank of Skidoo. The Bank of Skidoo has no excess reserv

es and is subject to a 4 percent required reserve ratio.
Business
1 answer:
Alborosie3 years ago
5 0

Answer:

The question is incomplete since the requirements are missing, but I guess that it deals with the bank's ability to create money.

When you deposit money into a bank account, the bank will then lend most of that money to other clients. This is possible due to the money multiplier = 1 / required reserve rate = 1 / 4% = 25

the total increase in money supply = $12,000 x 25 = $300,000

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A company's beginning Work in Process inventory consisted of 37,000 units that were 90% complete with respect to direct labor. A
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