Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 12, Problem 9E
To determine
The deposit expansion multiplier measures the maximum possible expansion of the money supply in the banking system. State the factors could cause the actual expansion of the money supply to differ from that given by the deposit expansion multiplier
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Describe three factors that will cause the banking system not to be able to
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Suppose that during a particular year customers deposit $4,000 into their bank accounts, and extended money multiplier is equal to 25. Calculate the total amount which the money supply in the banking system will eventually increase to. Show all steps involved in the calculation.
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