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Anna [14]
3 years ago
13

Topic: How Banks Create Money

Business
1 answer:
Anna35 [415]3 years ago
4 0

Answer:

$200 million

Explanation:

Increase in the total value of checkable deposit is determined by the money multiplier

Money multiplier = amount deposited /required  reserve requirement

Required reserve requirement is the percentage of deposits required of banks to keep as reserves by the central bank

$40 million / 0.2 = $200 million

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