Question:

Mr. Sam Lucky lives in Houston Texas and always deposits money into check account in a bank nearby. Please calculate the money creation in the U.S. banking system with required reserve ratio at 0.20 in each of the following cases:

(a) Sam’s parents wired him $100,000 from Japan.

(b) Sam won $100,000 from Texas lottery.

(c) Sam found $100,000 worth collectable coins underground at his house.

(d) Sam got a $100,000 check which is issued in a U.S. bank from his aunt as gift.