Suppose banks have a reserve requirement of 10%. There is new deposit of
$200 into the banking system. What would be the maximum amount of new
loans that can be made from this new deposit of $200? (Hint: this is referring
back to the money multiplier in lecture 20; the formula for the sum of an
infinite geometric series is: for any r: 1 + r + r^2+r^3 ⋯ = 1/1-r)



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