Consider an economy with a fractional reserve banking and no currency held by public. If the monetary base is $1,000,000 and the reserve-deposit ratio 0.1, the money supply is

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The money supply in a fractional reserve banking system can be calculated using the money multiplier formula, which is 1/reserve-deposit ratio. In this case, the reserve-deposit ratio is 0.1, so the money multiplier is 1/0.1 = 10. Therefore, the money supply is the monetary base times the money multiplier, which is $1,000,000 * 10 = $10,000,000.

Consider an Economy with a Fractional Reserve Banking and No