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Use the Following to Answer Questions

Question 122

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Use the following to answer questions .
Exhibit: Reserves, Loans, and Money
Use the following to answer questions . Exhibit: Reserves, Loans, and Money -(Exhibit: Reserves, Loans, and Money) The required reserve ratio is 10%. By how much could the banking system ultimately increase the money supply if all excess reserves are loaned out, people never withdraw cash, and all loan proceeds are spent? A) $30 million B) $70 million C) $300 million D) $700 million
-(Exhibit: Reserves, Loans, and Money) The required reserve ratio is 10%. By how much could the banking system ultimately increase the money supply if all excess reserves are loaned out, people never withdraw cash, and all loan proceeds are spent?


A) $30 million
B) $70 million
C) $300 million
D) $700 million

Correct Answer:

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