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Consider a country where all money is currently held as cash and the money supply has a value of $2,200. A banking system is developed, and the residents of the country deposlt the $2,200 of cash into the banking system and decide they no longer want to hold any cash. If the reserve ratio is equal to 4%, then the banking system has the ability to create $ money supply in the economy will be equal to $
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Consider a country where all money is currently held as cash and the money supply has a value of $2,...
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