If There Is No Currency and the Proceeds of All

question 34

Multiple Choice

If there is no currency and the proceeds of all loans are deposited somewhere in the banking system and if rr denotes the reserve-deposit ratio, then the total money supply is:

• A) reserves divided by rr.
• B) 1/rr.
• C) reserves times rr.
• D) reserves divided by (1 - rr).

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Definitions:

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