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What will happen to the money supply under the following circumstances in the banking system?
a. When the required reserve ratio is 20% and a customer deposits $700 in her checkable bank deposit, the money supply will potentially (increase, decrease) ________ by $ ________.
b. When the required reserve ratio is 10% and a customer withdraws $700 from her checkable bank deposit, the money supply will potentially (increase, decrease) ________ by $ ________.
This document contains various important questions and their appropriate answers in the subject field of Economics.
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