ECON MACRO
5th Edition
ISBN:9781337000529
Author:William A. McEachern
Publisher:William A. McEachern
Chapter14: Banking And The Money Supply
Section: Chapter Questions
Problem 2.2P
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* 35
Suppose that in a country the total holdings of banks were as follows: total
reserves (required reserves + excess reserves) = unknown, loans = $855
million, deposits = $900 million
These are the only assets and liabilities
Assume that people hold no currency. Based on the required reserve ratio
in the previous question, what is the maximum amount of total money
supply that can be created from the deposit?
90,000 million
22,500 million
45,000 million
30,000 million
Transcribed Image Text:* 35 Suppose that in a country the total holdings of banks were as follows: total reserves (required reserves + excess reserves) = unknown, loans = $855 million, deposits = $900 million These are the only assets and liabilities Assume that people hold no currency. Based on the required reserve ratio in the previous question, what is the maximum amount of total money supply that can be created from the deposit? 90,000 million 22,500 million 45,000 million 30,000 million
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