The document describes two scenarios of the money multiplier process. In the first scenario, an initial $5,000 deposit is multiplied by 10 through 133 banks, creating $45,000 in new deposits and money. In the second scenario, the reserve requirement is higher at 40% and the money multiplier is lower at 2.5, so the $5,000 deposit is multiplied through 29 banks, creating $7,500 in new deposits and money.
The document describes two scenarios of the money multiplier process. In the first scenario, an initial $5,000 deposit is multiplied by 10 through 133 banks, creating $45,000 in new deposits and money. In the second scenario, the reserve requirement is higher at 40% and the money multiplier is lower at 2.5, so the $5,000 deposit is multiplied through 29 banks, creating $7,500 in new deposits and money.
The document describes two scenarios of the money multiplier process. In the first scenario, an initial $5,000 deposit is multiplied by 10 through 133 banks, creating $45,000 in new deposits and money. In the second scenario, the reserve requirement is higher at 40% and the money multiplier is lower at 2.5, so the $5,000 deposit is multiplied through 29 banks, creating $7,500 in new deposits and money.
The document describes two scenarios of the money multiplier process. In the first scenario, an initial $5,000 deposit is multiplied by 10 through 133 banks, creating $45,000 in new deposits and money. In the second scenario, the reserve requirement is higher at 40% and the money multiplier is lower at 2.5, so the $5,000 deposit is multiplied through 29 banks, creating $7,500 in new deposits and money.
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Scenario 1:
Initial Deposit = 5,000
Reserve requirement = 10% Money Multiplier = 10 How many banks will it take to go through the multiplier process? 133 What will the Total New Deposits be? 50000 How much in Total Excess Reserves will there when the multiplier process completes? 45000 How much money will be created? 45000