Table 21-6. -Refer to Table 21-6.Assume the Fed's Reserve Requirement Is 6

question 86

Multiple Choice

Table 21-6.

-Refer to Table 21-6.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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