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Suppose instead of defaultin… Show more A bank has $500 of

Paper help Economics Suppose instead of defaultin… Show more A bank has $500 of

Economics

Suppose instead of defaultin… Show more A bank has $500 of

Suppose instead of defaultin… Show more A bank has $500 of capital, $750 of deposits and “rr†is 20%. Suppose instead of defaulting, all of the loans are paid back (without interest, for simplicity). How does this change the money supply? 2. How much of the currency is held by households? How much of the currency is held by banks? • Show less

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