In the Simple Deposit Expansion Model, If the Bank of Canada

question 33

Multiple Choice

In the simple deposit expansion model, if the Bank of Canada purchases $100 worth of bonds from a bank that previously had no excess reserves, the bank can now increase its loans by ________.

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

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