If a Bank Has $2,000 in Excess Reserves and a 10

question 43

True/False

If a bank has $2,000 in excess reserves and a 10% reserve requirement, the maximum potential increase in the money supply is $20,000.

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Definitions:

\(n + 1\)

Represents the next consecutive integer or element following 'n' in a sequence.

\(\frac { 20 } { n + 1 }\)

A mathematical fraction expressing the relation of the number 20 to one more than some number n.

\(- 4\)

A negative integer, four units less than zero.

\(3 ^ { n }\)

An exponential expression where 3 is the base and \(n\) is the exponent, indicating three raised to the power of \(n\).