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On a Certain Date the Banking System Had $2 Billion

question 113

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On a certain date the banking system had $2 billion in excess reserves. The legally required reserve ratio was 12.5 percent. Potentially, if these funds were fully loaned out, the banking system as a whole could increase the money supply by a maximum of:

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Definitions:

Purity

The condition or quality of being free from contamination, pollutants, or immoral behavior; often associated with cleanliness or moral wholesomeness.

Wavelength

A measure of the distance between consecutive points of a wave, typically used in the context of electromagnetic waves.

Night

The period of darkness in each twenty-four hours; the time from sunset to sunrise.

Receptors

Specialized cells or proteins that detect and respond to external substances, such as hormones, neurotransmitters, or sensory stimuli.

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