Question

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

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.