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You decide to take $400 out of your piggy bank at home and place it in the bank. If the reserve requirement is 2 percent, how much can your $400 increase the amount of money in the economy?
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You decide to take $400 out of your piggy bank at home and place it in the bank. If the reserve requirement is 2 percent, how much can your $400 increase the amount of money in the economy?

User Satya P
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1 Answer

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It can increase twice the the amount of the money placed in the bank.
User Erik Westermann
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