You have just inherited $100,000 from your rich uncle
Sam. Being the conservative sort, you rush to...

Question

You have just inherited $100,000 from your rich uncle
Sam. Being the conservative sort, you rush to your local bank and deposit the
entire windfall. The reserve requirement is currently 10 percent. What is the
immediate impact on the balance sheet of the bank? Mention each account
affected and the appropriate amount. Also, assuming your bank lends out money
to the extent allowed by law, how much will the money supply grow beyond the
initial $100,000 deposit?

David · Accepted Answer

You have just inherited $100,000 from your rich uncle Sam. Being the conservative sort, you rush to your 
local bank and deposit the entire windfall. The reserve requirement is currently 10 percent. What is the 
immediate impact on the balance sheet of the bank? Mention each account affected and the appropriate 
amount. Also, assuming your bank lends out money to the extent allowed by law,

You have just inherited $100,000 from your rich uncle Sam. Being the conservative sort, you rush to your local bank and deposit the entire windfall. The reserve requirement is currently 10 percent....

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