The Required Reserve Ratio Is 0

question 52

Multiple Choice

The required reserve ratio is 0.1, the level of deposits is $1,000, the level of currency held by the public is $500, and the level of excess reserves is $100. If the Fed increases the monetary base by $300, then M1 rises by approximately

• A) $3,000.
• B) $2,250.
• C) $643.
• D) $300.

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