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Assume there is $100 dollars in the economy that is deposited in a bank. Assume that there are multiple banks, and there is no other money in the economy at the moment. Also assume that once the money is deposited in a bank; it is lent and it eventually makes it back to another bank. At the moment, the FED has established that banks have to put in reserves 11% of all of their deposits. After 3 deposits, how much money in total is in the reserves of the banks? 238.70 29.50

Assume there is $100 dollars in the economy that is deposited in a bank. Assume that there are multiple banks, and there is no other money in the economy at the moment. Also assume that once the money is deposited in a bank; it is lent and it eventually makes it back to another bank. At the moment, the FED has established that banks have to put in reserves 11% of all of their deposits. After 3 deposits, how much money in total is in the reserves of the banks? 238.70 29.50

Brief Principles of Macroeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter11: The Monetary System
Section: Chapter Questions
Problem 5PA
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Assume there is $100 dollars in the economy that is deposited in a bank. Assume that there are multiple banks, and there is no other money in the economy at the moment. Also assume that once the money is deposited in a bank; it is lent and it eventually makes it back to another bank. At the moment, the FED has established that banks have to put in reserves 11% of all of their deposits. After 3 deposits, how much money in total is in the reserves of the banks? 238.70 29.50 100 268.21
Transcribed Image Text:Assume there is $100 dollars in the economy that is deposited in a bank. Assume that there are multiple banks, and there is no other money in the economy at the moment. Also assume that once the money is deposited in a bank; it is lent and it eventually makes it back to another bank. At the moment, the FED has established that banks have to put in reserves 11% of all of their deposits. After 3 deposits, how much money in total is in the reserves of the banks? 238.70 29.50 100 268.21
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