If the Reserve Ratio Is 20 Percent, How Much Money

question 141

Short Answer

If the reserve ratio is 20 percent, how much money can be created from $100 of reserves? Show your work.

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Definitions:

Rural Areas

Regions of land that are not densely populated and are often characterized by farming or natural settings.

Agriculture

The practice of cultivating the soil, growing crops, and raising livestock for the purpose of food production or other agricultural products.

Urban Areas

Densely populated regions that are characterized by significant built environment and infrastructure, including cities and towns.

Developing World

Nations with a lower living standard, undeveloped industrial base, and low Human Development Index relative to other countries.