In the Simple Deposit Expansion Model,if the Fed Extends a $100

question 196

Multiple Choice

In the simple deposit expansion model,if the Fed extends a $100 discount loan to a bank that previously had no excess reserves,deposits in the banking system can potentially increase by

• A)$10.
• B)$100.
• C)$100 times the reciprocal of the required reserve ratio.
• D)$100 times the required reserve ratio.

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