(Answered) Assume that the required reserve rate is ten percent banks

Economics

Assume that the required reserve rate is ten percent, banks want to hold excess reserves in an amount that equals three percent of deposits, and the public withdraws ten percent of every deposit in cash. An open market purchase of $1 million by the Fed will see banking system deposits increase by how much? Please show your work?

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Business Economics, Economics

Category:- Business Economics
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