Table 16-6. -Refer to Table 16-6. Assume the Fed's Reserve Requirement Is

question 300

Multiple Choice

Table 16-6.
-Refer to Table 16-6. Assume the Fed's reserve requirement is 6 percent and that the Bank of Springfield makes new loans so as to make its new reserve ratio 6 percent. From then on, no bank holds any excess reserves. Assume also that people hold only deposits and no currency. Then by what amount does the economy's money supply increase?

• A)$50,200
• B)$60,000
• C)$72,000
• D)$106,000

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