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You Withdraw $2,000 from Your Account

Question 288

Multiple Choice

You withdraw $2,000 from your account. Your bank has a desired reserve ratio of 20 percent. This transaction, by itself, will directly reduce


A) the quantity of money by $2,000.
B) deposits by $2,000.
C) the quantity of money by $1,600.
D) deposits by $1,600.

Correct Answer:

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