# Banks and the money supply 1. While cleaning your apartment, you .pdf

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Banks and the money supply: 1. While cleaning your apartment, you look under the sofa cushion and find a \$50 bill. You deposit the bill in your checking account. The Feds reserve requirement is 20% of deposits. A. What is the maximum amount that the money supply could increase (please show your work)? (14 points) B. What is the minimum amount that the money supply could increase? (6 points).

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### Banks and the money supply 1. While cleaning your apartment, you .pdf

• 1. Banks and the money supply: 1. While cleaning your apartment, you look under the sofa cushion and find a \$50 bill. You deposit the bill in your checking account. The Feds reserve requirement is 20% of deposits. A. What is the maximum amount that the money supply could increase (please show your work)? (14 points) B. What is the minimum amount that the money supply could increase? (6 points)
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