Multiple Choice
A bank has excess reserves of $1,000,000 and makes a new loan for $500,000.If the bank faces a 10 percent required reserve ratio,by how much will the money supply increase when the loan is made?
A) $0
B) $50,000
C) $5,000,000
D) $1,500,000
E) $2,000,000
Correct Answer:
Verified
Correct Answer:
Verified
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