Money Week - A Beginner's Guide to the Reserve Ratio
Thursday October 5, 2006
A reader asks: "Suppose the required reserve ratio is 0.2.
If an extra $20 billion in reserves is injected into the banking system through an open market purchase of bonds, by how much can demand deposits increase?"
See my answer in: A Beginner's Guide to the Reserve Ratio.
If an extra $20 billion in reserves is injected into the banking system through an open market purchase of bonds, by how much can demand deposits increase?"
See my answer in: A Beginner's Guide to the Reserve Ratio.
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