Suppose You Found a $100 Bill That Was Lost for Several

Multiple Choice

Suppose you found a $100 bill that was lost for several years under your grandmother's mattress and you decided to deposit this money in a commercial bank. If the target reserve ratio were 20 percent and all excess reserves were lent out, your new deposit of $100 would lead to an eventual expansion of the money supply of

A) $120.
B) $200.
C) $500.
D) $1200.
E) $2000.