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. If the banking system has a cash drain of 5 percent, its target reserve ratio is 20 percent, and all excess reserves were lent out, your new deposit of the $100 bill would lead to an eventual expansion of the money supply of

A) $20.
B) $25.
C) $200.
D) $400.
E) $500.