Assuming All Excess Reserves Are Loaned Out, Currency Holdings by the Public

question 66

Multiple Choice

Assuming all excess reserves are loaned out, currency holdings by the public are zero, and a reserve ratio of 25 percent, an initial deposit of $3,000 will lead to a total increase in deposits of

• A) $750.
• B) $2,250.
• C) $12,000.
• D) $36,000.