If the federal reserve decreases the reserve rate from 10% to 8%, how does this affect the amount of money that would result because of fractional-reserve banking from an inital deposit into a bank of $40,000

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Mathematics

Brynlee Huynh

16 December, 10:44

If the federal reserve decreases the reserve rate from 10% to 8%, how does this affect the amount of money that would result because of fractional-reserve banking from an inital deposit into a bank of $40,000

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Leila Ball · Answer 1

If the Federal Reserve decreases the reserve rate from 10% to 8%, the affected amount of money that would result because of fractional-reserve banking from an initial deposit into a bank of $40,000 would be $8000.