If M Equals the Maximum Number of New Dollars That

question 111

Multiple Choice

If m equals the maximum number of new dollars that can be created for a single dollar of excess reserves and R equals the required reserve ratio, then for the banking system,

• A)m = R − 1.
• B)R = m/1.
• C)R = m − 1.
• D)m = 1/R.

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