Answer the Indicated Question on the Basis of the Information

question 69

Multiple Choice

Answer the indicated question on the basis of the information in Table 14.2.Each question is based on the original balance sheet.

-In Table 14.2,if the Fed changes the required reserve ratio to 25 percent,the lending capacity of the banking system will eventually:

• A) Rise by $160 billion.
• B) Fall by $160 billion.
• C) Rise by $40 billion.
• D) Fall by $40 billion.

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