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Suppose that the desired reserve ratio is 10 percent and you withdraw $25,000 from Bank of Montreal and hold it in cash.What is the deposit multiplier? What is the total decrease in deposits in the banking system? What is the change in the money supply?
Corresponding Decrease
A decrease in one variable or metric that occurs in response to an increase in another variable.
Liability
A financial obligation or debt that an entity is required to pay to another entity.
Change In Accounting Principle
An adjustment in the way a company recognizes, measures, presents, or discloses financial information due to a change in accounting policy.
Continuing Operations
The parts of a business expected to continue operating in the foreseeable future, as opposed to segments being discontinued or sold.
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