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By how much does money supply increase in each case note

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Spielberg takes $100 out of his piggy bank and deposits it in his Hollywood Bank checking account. By how much does the total amount of deposits in the banking system increase:

(i) if this $100 stays in the banking system as reserves, and

(ii) if banks hold reserves equal to 10 percent of deposits?

By how much does the money supply increase in each case? Note that money supply consists of currency and demand deposits.

Reference no: EM13396264

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