Suppose a Banking System Has a Required Reserve Ratio of 0.10.How

question 49

Multiple Choice

Suppose a banking system has a required reserve ratio of 0.10.How much can the money supply increase in response to a $500 increase in excess reserves for the whole banking system?

• A)$50.
• B)$500.
• C)$5,000.
• D)$4,500.

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