Multiple Choice
Suppose that a banking system has $10,000,000 in demand deposits and actual reserves of $1,200,000.If the target reserve ratio for all banks is 10 percent,what is the maximum possible expansion of the money supply?
A) $2,200,000.
B) $115 000.
C) $200,000.
D) $12,000,000.
E) $2,000,000.
Correct Answer:
Verified
Correct Answer:
Verified
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