If the Reserve-Deposit Ratio Is 20% and the Banking System

question 124

Multiple Choice

If the reserve-deposit ratio is 20% and the banking system receives an additional $10 million in reserves,bank deposits will increase by

• A) $4 million.
• B) $10 million.
• C) $50 million.
• D) $250 million.
• E) $400 million.

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Definitions:

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