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If the required reserve ratio is 3%, an initial demand deposit made in a bank of $100,000 can result in an expansion in the money supply of

Respuesta :

The expansion in the money supply given the reserve ratio is $3,333,333,33

What is the expansion in money supply?

The reserve ratio is a compulsory percentage of customer deposits that must be kept as reserves with the Central Bank. The increase in money supply is dependent on the amount deposited and the reserve ratio.

Money multiplier = amount deposited / reserve requirement

$100,000 / 0.03 = $3,333,333,33

To learn more about money multiplier, please check: https://brainly.com/question/25812353

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