If banks faced a 100 percent reserve requirement, a $10,000 reduction in banking reserves would decrease the money supply by:

Name: If banks faced a 100 percent reserve requirement, a $10,000 reduction in banking reserves would decrease the money supply by:
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With a 100 percent reserve requirement, banks cannot lend out any of their deposits, so a $10,000 reduction in reserves directly reduces the money supply by $10,000.

If Banks Faced a 100 Percent Reserve Requirement, a $10,000