Multiple Choice
If Bank A has excess reserves of $1 million and all other banks in the system do not have any excess reserves, then the amount of additional loans that can be made by the banking system will be
A) $1 million also.
B) a fraction of $1 million.
C) a multiple of $1 million.
D) $1 million times the required reserve ratio.
Correct Answer:
Verified
Correct Answer:
Verified
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