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If All the Banks in the Banking System Collectively Have

Question 46

Multiple Choice

If all the banks in the banking system collectively have $20 million in cash reserves and have a target reserve ratio of 20 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.

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