Question 18.20

9. What will happen to the money supply under the following circumstances in a checkable-deposits-only system?

  1. The required reserve ratio is 25%, and a depositor withdraws $700 from his checkable bank deposit.

  2. The required reserve ratio is 5%, and a depositor withdraws $700 from his checkable bank deposit.

  3. The required reserve ratio is 20%, and a customer deposits $750 to her checkable bank deposit.

  4. The required reserve ratio is 10%, and a customer deposits $600 to her checkable bank deposit.