ECO – Suppose there is $120 million of cash and that half

ECO – Suppose there is $120 million of cash and that half

Subject: Education    / General Education
Question

Suppose there is $120 million of cash and that half of this cash is held in bank vaults as required reserves (that is, banks hold no excess reserves). How large will the money supply be if the required reserve ratio is 10%? 12.5%? 16.2/3%?