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The Fed sets a Reserve Requirement of 20%. A citizen takes $5000 from their cash holdings and places the money into a bank. Based on this action What is the initial amount the bank can lend out based on the deposit?

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  1. 12 April, 02:08
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    20 percent times 5000 is equals to 1000 dollars. 5000 take away 1000 is equal to 4000 dollars that the initial amount the bank can lend out based on the deposit.
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