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How Can a New Deposit of $10,000 at One Bank

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Essay

How can a new deposit of $10,000 at one bank create other new deposits at other banks? Suppose the desired reserve ratio is 10 percent and people keep no currency outside of the banks.What will be the new amount of deposits in the second and third rounds?


Definitions:

Tested Once

Refers to conducting a particular test or experiment only one time under a specific set of conditions or parameters.

Tested Twice

The act of conducting a test or evaluation on the same subject or group twice to compare results, check for consistency, or measure change.

Participants

Individuals who take part in a study or research, providing data for analysis.

F Statistic

A ratio used in ANOVA (Analysis of Variance) tests, representing the variance between group means over the variance within groups.

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