If the required reserve ratio is 3%, an initial demand deposit made in a bank of $100,000 can result in an expansion in the money supply of

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The expansion in the money supply is calculated using the money multiplier formula, which is 1/required reserve ratio. With a 3% reserve ratio, the multiplier is 1/0.03 = 33.33. Therefore, an initial deposit of $100,000 can expand the money supply by $100,000 * 33.33 = $3,333,000.

If the Required Reserve Ratio Is 3%, an Initial Demand