Answer to Question #52320 in Macroeconomics for Samiya naseer
The Central Bank sets the reserve ratio for the banks at 10%.
a) illustrate how the bank creates money with the help of the given information. Show first five steps.
b) calculate the total money creation in the economy with the help of formula.
b) the total money creation in the economy is 100,000/0.1 = AED 1,000,000.
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