-Refer to Table 10-4

Multiple Choice

-Refer to Table 10-4. Assume that all other banks hold only the required 4 percent of deposits as reserves, and that people hold only deposits and no currency. If the Bank of the Kawarthas decides to hold reserves of 4 percent, by how much would the economy's money supply increase?

A) $30,000
B) $35,000
C) $42,000
D) $45,000