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if the federal reserve deceases the reserve rate from 5% to 2%, how does this affect the amount of money that would result because of fractional reserve banking from an initial deposit into a bank of 25,
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if the federal reserve deceases the reserve rate from 5% to 2%, how does this affect the amount of money that would result because of fractional reserve banking from an initial deposit into a bank of 25,000

User Evon
by
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1 Answer

7 votes
25,000÷0.05
=500,000

25,000÷0.02
=1,250,000
increased by
1,250,000−500,000
=750,000
User Asibahi
by
7.8k points
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