f your initial deposit at Westerville bank causes excess reserves to rise by $15 and the money supply to increase by $60, then what must the reserve requirement be 0.25.
The term bank refers to the financial institution offering the services related to the term money. The bank is manage financial system to handling accounts and manage the cash. The bank is provided different facilities such as cash transaction, accounts on bank, deposition, check, provided locker facility, loans and provided different schemes.
1/reserve requirement ×excess reserves = change in M₁
1 / change in M₁ × excess reserves reserve requirement
1 /$60 × $15 = 0.25
initial deposit at Westerville bank are the supply to increase.
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