If people never withdraw cash from banks and there are no required reserves,how much money can the banking system potentially create for a given amount of new deposits?

Question

Quizplus · Accepted Answer

If there are no required reserves and people never withdraw cash from banks, the banking system can potentially create an infinite amount of money for a given amount of new deposits. This is because banks can continuously lend out the new deposits they receive, and those who receive loans can deposit that money back into the bank, allowing the bank to make even more loans. The process can continue indefinitely, resulting in an infinite expansion of the money supply. However, this scenario is unlikely to occur in reality as banks are required to hold reserves and people do withdraw cash from banks.

If People Never Withdraw Cash from Banks and There Are