Ratio of 10% and assuming that banks keep no excess reserves, imagine that $300 is deposited into a checking account. by how much more does the money supply increase if the fed lowers the required reserve ratio to 7%?
If the ratio of 10% and assuming that banks keep no excess reserves, imagine that $300 is deposited into a checking account, then $ 1,287 is the amount for the money supply to increase if the fed lowers the required reserve ratio to 7%.
