Suppose a banking system has $200 million in deposits, a required reserve ratio of 10 percent, and total bank reserves of $35 million. then the potential increase in deposit creation for the whole banking system is equal to

To find the potential increase, the equation would be the amount of excess reserves (or deposits multiplied by the reserve ratio) multiplied by (100 divided by the required ratio). In this case, that would be (35 - ($200M * 0.10)) * (100/10), or (35M - 20M) * (10). This would leave 15M * 10, or $150 million in potential increase in deposits for the entire banking system.

The business cycle is the periodic but irregular up-and-down movement in economic activity, measured by fluctuations in real gross domestic product (gdp) and other macroeconomic variables. a business cycle is typically characterized by four phases—recession, recovery, growth, and decline—that repeat themselves over time. economists note, however, that complete business cycles vary in length. the duration of business cycles can be anywhere from about two to twelve years, with most cycles averaging six years in length. some business analysts use the business cycle model and terminology to study and explain fluctuations in business inventory and other individual elements of corporate operations. but the term "business cycle" is still primarily associated with larger (industry-wide, regional, national, or even international) business trends.