Multiple Choice
Suppose the required reserve ratio is 0.2 and the Fed buys $100,000 in government securities from Big Bank.The commercial banking system creates _____ as a result of this initial injection by the Fed.
A) $1,000,000
B) $500,000
C) $100,000
D) $80,000
E) $200,000
Correct Answer:
Verified
Correct Answer:
Verified
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