Multiple Choice
Suppose the reserve ratio is 25 percent and the public holds $10 million in cash. Then the public decides to withdraw $5 million from the banks. How does the money supply eventually change?
A) falls by $5 million
B) falls by $10 million
C) falls by $20 million
D) falls by $35 million
Correct Answer:
Verified
Correct Answer:
Verified
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