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The Economy Tomorrow Suppose a person who is developing an app crowdfunds $20,000 and holds this as cash for future expenses. If this $20,000 comes from donors' checking accounts, by how much will the money supply fall of the reserve ratio is 10 percent? Instructions: Enter your response as a whole number The money supply will decrease by $___________.

Respuesta :

Answer:

Decrease in money supply =  $200,000

Explanation:

Given:

Check account balance = 20,000

Reserve ratio = 10 percent

Find:

Money supply will decrease

Computation:

Decrease in money supply = Decrease in check account balance[1/reserve ratio]

Decrease in money supply = $20,000[1/0.10]

Decrease in money supply =  $200,000

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