Table 11-6.

-Refer to Table 11-6. Assume the Fed's reserve requirement is 6 percent and that the Bank of Springfield makes new loans so as to make its new reserve ratio 6 percent. From then on, no bank holds any excess reserves. Assume also that people hold only deposits and no currency. Then by what amount does the economy's money supply increase?
A) $50,200
B) $60,000
C) $72,000
D) $106,000

Question

Table 11-6.
 
-Refer to Table 11-6. Assume the Fed's reserve requirement is 6 percent and that the Bank of Springfield makes new loans so as to make its new reserve ratio 6 percent. From then on, no bank holds any excess reserves. Assume also that people hold only deposits and no currency. Then by what amount does the economy's money supply increase?
A) $50,200 
B) $60,000 
C) $72,000 
D) $106,000

Quizplus · Accepted Answer

The Answer of Table 11-6.
 
-Refer to Table 11-6. Assume the Fed's reserve requirement is 6 percent and that the Bank of Springfield makes new loans so as to make its new reserve ratio 6 percent. From then on, no bank holds any excess reserves. Assume also that people hold only deposits and no currency. Then by what amount does the economy's money supply increase?
A) $50,200 
B) $60,000 
C) $72,000 
D) $106,000

Table 11-6. -Refer to Table 11-6. Assume the Fed's Reserve Requirement Is