Currency into her checking account

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A consumer deposits of $1,000 in currency into her checking account. The bank sets aside $200 aside as required reserves (i.e. assume a 20% minimum reserve requirement), and then makes a loan of $800 to a new borrower. This set of transactions increases the money supply by $1,800. Indicate whether the last statement is TRUE or FALSE; and then provide support for your answer.

Reference no: EM131075064

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