Multiple Choice
If all the banks in the banking system collectively have $20 million in cash reserves, and have a target reserve ratio of 5 percent, the maximum amount of deposits the banking system can support is
A) $4 million.
B) $40 million.
C) $80 million.
D) $100 million.
E) $400 million.
Correct Answer:
Verified
Correct Answer:
Verified
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