Answer to Question #90350 in Macroeconomics for tay

Question #90350

Using the money multiplier 16.66, how much will the money supply change if checkable deposits increase by $300 million?

Expert's answer

m=1/rr

rr=1/16.16=0.062

RR=300*0.062=18.6 m

Money supply change =(300-18.6)*16.16=4547 $million

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