Suppose the Fed purchases $100 million worth of government bonds from a bond dealer who then deposits the proceeds at Bank ABC.
(A) If the requured reserve ratid is 10 percent, what is the maganum mant of lans that Bark INF can make?
(B) What is the maginum andunt of depasits that the banding system as a whole can cregte? What is the maginum arrount of lomen thet can be created?

Question

Suppose the Fed purchases $100 million worth of government bonds from a bond dealer who then deposits the proceeds at Bank ABC.
 (A) If the requured reserve ratid is 10 percent, what is the maganum mant of lans that Bark INF can make?
(B) What is the maginum andunt of depasits that the banding system as a whole can cregte? What is the maginum arrount of lomen thet can be created?

Quizplus · Accepted Answer

The Answer of Suppose the Fed purchases $100 million worth of government bonds from a bond dealer who then deposits the proceeds at Bank ABC.
 (A) If the requured reserve ratid is 10 percent, what is the maganum mant of lans that Bark INF can make?
(B) What is the maginum andunt of depasits that the banding system as a whole can cregte? What is the maginum arrount of lomen thet can be created?

Suppose the Fed Purchases $100 Million Worth of Government Bonds