For the Money Expansion Process to Produce the Maximum Potential

question 415

Multiple Choice

For the money expansion process to produce the maximum potential multiplier effect

• A) all loans of a given bank have to be deposited in that bank.
• B) the required reserve ratio has to be 100 percent.
• C) the Fed has to sell government bonds to back up the loans.
• D) all loans from banks have to be redeposited throughout the banking system.

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Definitions:

Seventeenth Century

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