Multiple Choice
Assume the banking system has no excess reserves, but the desired reserve is 20 percent.Suppose the Bank of Canada purchases $10,000 in Canadian government securities from the Academy National Bank.What is the ultimate potential increase in the money supply?
A) $2,000
B) $8,000
C) $10,000
D) $50,000
Correct Answer:
Verified
Correct Answer:
Verified
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