If the reserve ratio is 100 percent, how much will the money supply eventually increase if there is a deposit of $500 of paper money in a bank?

Name: If the reserve ratio is 100 percent, how much will the money supply eventually increase if there is a deposit of $500 of paper money in a bank?
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Quizplus · Accepted Answer

If the reserve ratio is 100 percent, it means the bank has to hold all the deposit as reserves and cannot lend out any money. Therefore, there will be no increase in the money supply.

If the Reserve Ratio Is 100 Percent, How Much Will