Table 11-5. -Refer to Table 11-5. Assume the Fed's Reserve Requirement Is

Multiple Choice

Table 11-5.

-Refer to Table 11-5. Assume the Fed's reserve requirement is 9 percent and all banks besides the Bank of Pleasantville are exactly in compliance with the 9 percent requirement. Further assume that people hold only deposits and no currency. Starting from the situation as depicted by the T-account, if the Bank of Pleasantville decides to make new loans so as to end up with no excess reserves, then by how much does the money supply eventually increase?

A) $555.00.
B) $1,200.00.
C) $1,777.78.
D) $2,222.22.