The answer process is as follows:

Currency multiplier: 1/20%=5

Money supply: 1, 000 billion * 5 = 500 billion.

Increment of loans: 500 billion * 80% = 4 trillion.

Extended data

The central bank has stipulated the minimum reserve that the deposits absorbed by commercial banks cannot be used for loans as the statutory reserve ratio and the ratio of the statutory reserve to the total bank deposits. Represented by R, r=RR/D, that is, reserve/deposit.

After commercial banks absorb deposits, they generally take a certain proportion as reserves and use the rest for lending. In most countries, the ratio of reserve to deposit has gradually become mandatory, that is, the ratio cannot be lower than a certain legal amount. This is the lowest ratio of reserve to deposit of commercial banks. The excess is called the excess reserve ratio, and the minimum is called the statutory reserve ratio.

At first, the central bank stipulated the statutory reserve ratio in order to reduce the operational risk of commercial banks and protect the deposit safety of depositors. In the future, it will gradually be used as a monetary policy tool to control the credit scale and money supply. In the period of economic upsurge and inflation, the central bank can raise the statutory reserve ratio to control the excessive expansion of credit.

On the one hand, it reduces the funds used by financial institutions such as commercial banks for loans, on the other hand, it reduces the money created by commercial banks, thus shrinking the money supply, reducing investment and curbing total demand; On the contrary, when the economy is in recession and the unemployment rate is high, the central bank can increase the money supply, increase investment and stimulate demand by reducing the statutory reserve ratio.

Baidu encyclopedia-statutory reserve ratio