Suppose a Banking System Has $100,000 in Deposits,a Required Reserve

question 72

Multiple Choice

Suppose a banking system has $100,000 in deposits,a required reserve ratio of 25 percent,and total bank reserves for the whole system of $25,000.Then the potential increase in deposit creation for the whole system is equal to

• A)$0.
• B)$25,000.
• C)$50,000.
• D)$100,000.

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