Multiple Choice
If the Fed buys a $100,000 government security from a bank when the desired reserve ratio is 20 percent and the currency drain ratio is 5 percent,the bank can loan a maximum of
A) $75,000.
B) $80,000.
C) $100,000.
D) $95,000.
E) $85,000.
Correct Answer:
Verified
Correct Answer:
Verified
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