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If the Proceeds of All Loans Are Deposited Somewhere in the Banking

Question 57

Multiple Choice

If the proceeds of all loans are deposited somewhere in the banking system and if rr denotes the reserve-deposit ratio, then the total money supply is:


A) reserves divided by rr.
B) 1/rr.
C) reserves times rr.
D) reserves divided by (1 - rr) .

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