A bank receives new deposits equal to 200000 and the, Business Economics

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A bank receives new deposits equal to 200000 and the

A bank receives new deposits equal to $200,000 and the required reserve ratio is 10%. Assuming that desired ratio is equal to their required reserve ratio and no currency drain (C=0) answer the following questions::

a. What is the amount of new loans the bank can make? Show your work.

b. What is the amount of total deposit expansion (change in money supply) that can occur?

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Business Economics: A bank receives new deposits equal to 200000 and the

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Business Economics: A bank receives new deposits equal to 200000 and the

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