Assume that $1 million is deposited into a bank with a reserve requirement of 15 percent. the value of the money multiplier is 6.67.
what is the maximum change in money supply as a result of this deposit? (round your answer to two decimal places.)

maximum change in money supply is $6.67 million

Explanation:

given data

deposit = $1 million

reserve requirement = 15%

money multiplier = 6.67

to find out

maximum change in money supply

solution

we know here money multiplier is given =  6.67

so maximum change in money will be

maximum change = deposit × money multiplier

put here value

maximum change = $1 million × 6.67

maximum change = $6.67 million

so maximum change in money supply is $6.67 million

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