Answer:
The answer is $400,000
Explanation:
Quantity theory of money states that the quantity of money is directly proportional total spending in an economy.
Change in quantity of money = new deposits (which can also be new security) ÷ reserve requirements
The new security is $20,000
reserve requirements is 5 percent
Change in quantity of money is:
$20,000 / 0.05
=$400,000
