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29 September, 03:58

The Economy Tomorrow Suppose a person who is developing an app crowdfunds $15,000 and holds this as cash for future expenses. If this $15,000 comes from donors' checking accounts, by how much will the money supply fall if the reserve ratio is 20 percent? Instructions: Enter your response as a whole number. The money supply will decrease by $.

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  1. 29 September, 06:13
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    Question 1)

    Decrease in money supply = Decrease in checking account / Required reserves ratio

    Decrease in money supply = $25,000 / 0.05

    Decrease in money supply = $500,000

    NOTE: As per Answering Policy, first question is answered.

    Explanation:

    Question 1)

    Decrease in money supply = Decrease in checking account / Required reserves ratio

    Decrease in money supply = $25,000 / 0.05

    Decrease in money supply = $500,000

    NOTE: As per Answering Policy, first question is answered.
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