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The following information is for the entire banking system. Assume that banks are fully loaned up (banks hold only required reserves and make the maximum allowed amount of loans). Assume also that there is no currency leak.
Required Reserves Ratio=16%
Currency held outside of the banking system - 1.2006
Deposits = 1,800b
The Fed buys 320b in bonds from the public. The NEW money supply equals:
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