If Reserves Increase by $29 Million and the Required Reserve

question 26

Multiple Choice

If reserves increase by $29 million and the required reserve ratio is 11%,what is the resulting change in checkable deposits (or the money supply) ,assuming that there are no cash leakages and that banks hold zero excess reserves?

• A) $319 million
• B) $26.3 million
• C) $40 million
• D) $263.6 million

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