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Scenario-money creation

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Scenario: Money Creation

The reserve requirement is 20%, and Leroy deposits the $1,000 check he received as a graduation gift in his checking account. The bank does NOT want to hold excess reserves and the public does NOT want to hold any currency. Reference: Ref 34-2

(Scenario: Money Creation) According to the scenario Money Creation, how much of the $1,000 deposit is the bank required to keep in reserves?

Reference no: EM131292966

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Scenario-money creation : The reserve requirement is 20%, and Leroy deposits the $1,000 check he received as a graduation gift in his checking account. The bank does NOT want to hold excess reserves and the public does NOT want to hold any currency. Reference: Ref 34-2
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