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the banking system currently has $10 billion of reserves, none of which are excess. people hold only deposits and no currency, and the reserve requirement is 10 percent. if the fed raises the reserve requirement to 12.5 percent and at the same time buys $1 billion worth of bonds, then by how much does the money supply change?

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shristiparmar1221

The decline is $12 billion.

What is the banking system?

A network or collection of entities that offer us financial services is known as a banking system. These organizations are in b of managing the financial system, making loans, accepting deposits, and assisting with investments.

As one of the government's most crucial instruments for attaining economic growth without inflation, banks are crucial in the transmission of monetary policy. Banks enable the movement of money in the marketplaces where they operate, whereas the central bank regulates the money supply at the federal level.

Learn more about the banking system, from:

brainly.com/question/25247091

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