05-05-2006, 04:31 PM
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Confirmed User
Join Date: Jun 2005
Location: Irvine, CA
Posts: 2,442
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Quote:
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Originally Posted by xxweekxx
(b) Assume the commercial banking system has $800 billion in checkable deposits and $68 billion in reserves. The legal reserve ratio is 8%. To what level would the reserve ratio have to be changed to "wipe out" the money- creating ability of the banking system?
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800*.08 = 64
$64 billion (or a -$4B change)
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