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Business, 25.06.2021 16:20 robert7248

Assume that the government of Japan wants to control deflation and increase aggregate demand. The government then increased the Reserve Ratio from 10% to 20% hoping that a planned deposit of $5,000,000 will be made. A) Calculate the newtotal money supply that will be generated from the planned deposits.
B) Explain whether the government policy of increasing the reserve ratio is right.

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