ECON 104 Lecture 12: 31 March

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Department
Economics
Course
ECON 104
Professor
Ozgur Orhangazi
Semester
Spring

Description
Example: If loans get deposited in a different bank, how much could it increase loans by? Deposits = 8000 Loans = 6800 Reserves = 1200 Required reserve ratio = 10% 8000*10% = 800 (required reserves) Current reserves = 1200 Excess reserves = 400 If another bank, then use the multiplier, Excess reserves * 1/0.1 (because 0.1 = 10% and 10% is the reserve ratio) Use excess reserves man, exce
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