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Author Question: The Federal Reserves Tools of Monetary ControlSuppose a bank has $50 million in checking account ... (Read 88 times)

Katmoss16

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The Federal Reserves Tools of Monetary Control

Suppose a bank has $50 million in checking account deposits with no excess reserves and the required reserve ratio is 25%. If the Federal Reserve reduces the required reserve ratio to 5%, then the bank can make a maximum loan of ________.
◦ $12.5 million
◦ $0
◦ $2.5 million
◦ $10 million
Macroeconomics ¦ Acemoglu, Laibson, List ¦ 3rd Edition
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Marked as best answer by Katmoss16 on Nov 23, 2022

Jaclyn92G6

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Reply #1 on: Nov 23, 2022
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Katmoss16

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Reply 2 on: Nov 23, 2022
Great answer, keep it coming :)

raili21

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