(Answered) What will happen to the money supply under the following

Economics

What will happen to the money supply under the following circumstances in the banking system?

a. When the required reserve ratio is 25% and a depositor withdraws $700 from his checkable bank deposit, the money supply will potentially (increase, decrease) ________ by $ ________.

b. When the required reserve ratio is 5% and a depositor adds $700 to his checkable bank deposit, the money supply will potentially (increase, decrease) ________ by $ ________.

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Business Economics, Economics

Category:- Business Economics
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