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"At one time, the country of Sylvania had no banks, but had currency of $10 million. Then a banking system was established with a reserve requirement of 20 percent. The people of Sylvania now keep half their money in the form of currency and half in the form of bank deposits. If banks do not hold excess reserves, how much currency do the people of Sylvania now hold?"

The answer is $8.33 million, but how do you get there?

2007-03-10 16:01:06 · 1 answers · asked by Zowzooma, the Angry Deity 2 in Social Science Economics

1 answers

I can get $8MM but I can't get $8.33MM. It may be a rounding error on my part?

2007-03-12 16:30:09 · answer #1 · answered by Santa Barbara 7 · 1 0

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