# 1 You Deposit 2 000 Into Your Checking Account At Abc Bank The Reserve Ratio Is 20 A 2700056

1. You deposit \$2,000 into your checking account at ABC bank. The Reserve Ratio is 20%.
A) Make a T-account showing the deposit and the bank making a loan

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B) Using the money multiplier, how much will the money supply increase because of the \$2,000 deposit?

2. If the money supply is growing at a rate of 6% per year, real GDP is growing at a rate of 3% per year and velocity is constant, what will the inflation rate be?

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You deposit \$2,000 into your checking account at ABC bank. The Reserve Ratio is 20%. A) Make a T-account showing the deposit and the bank making a loan B) Using the money multiplier, how much will the money supply increase because of the \$2,000 deposit? If the money supply is growing at a rate of 6% per year, real GDP is growing at a rate of 3% per year and velocity is constant, what will the inflation rate be?

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MoneySupply-H….docx