At One Time,the Country of Aquilonia Had No Banks,but Had

question 6

Multiple Choice

At one time,the country of Aquilonia had no banks,but had currency of $10 million.Then a banking system was established with a reserve requirement of 10 percent.The people of Aquilonia deposited half of their currency into the banking system.If banks do not hold excess reserves,what is Aquilonia's money supply now?

• A) $10 million
• B) $11 million
• C) $50 million
• D) $55 million

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