26. Sally's grandmother has kept $100,000 in a cookie jar for years and gives it so Sally, who immediately puts it into her bank in a savings account. The bank has a 20% reserve rate. Which of the following is true? 1. Excess reserves increase by $20,000 II. The money supply increases by as much as $120,000 III. There is no change in the bank's money supply I a. I only b. II only C. I and II d. None of the above 4 DELL 33 US 19
26. Sally's grandmother has kept $100,000 in a cookie jar for years and gives it so Sally, who immediately puts it into her bank in a savings account. The bank has a 20% reserve rate. Which of the following is true? 1. Excess reserves increase by $20,000 II. The money supply increases by as much as $120,000 III. There is no change in the bank's money supply I a. I only b. II only C. I and II d. None of the above 4 DELL 33 US 19
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter27: Money And Banking
Section: Chapter Questions
Problem 31P: Humongous Bank is the only bank in the economy. The people in this economy have 20 million in money,...
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