Quote:
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Originally Posted by xxweekxx
(1) (a) The commercial banking system has $720 billion in demand deposit liabilities and $70 billion in reserves. The legal reserve ratio is 9%. What is the maximum expansion in the money supply that can take place? Show your calculations!
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70/x = 9/100
9x = 7000
x = 777.77777777777777777777777777778
$777,777,777,777.77 - 720,000,000,000
=
$57,777,777,777.77