Multiple Choice
Suppose the banking system has $10 million in reserves and the reserve ratio is 25 percent. Then bankers decide to decrease the reserve ratio to 20 percent. How does this decision eventually change the money supply?
A) increases by $0.5 million
B) increases by $5 million
C) increases by $10 million
D) increases by $20 million
Correct Answer:
Verified
Correct Answer:
Verified
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Q75: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB7554/.jpg" alt=" -Refer to Table