Suppose you found a $100 bill that was lost for several years under your grandmother's mattress. If the banking system has a cash drain of 5 percent, its target reserve ratio is 20 percent, and all excess reserves were lent out, your new deposit of the $100 bill would lead to an eventual expansion of the money supply of
A) $20.
B) $25.
C) $200.
D) $400.
E) $500.
Correct Answer:
Verified
Q56: Other things being equal, a rise in
Q57: The currency that is in circulation in
Q58: Doug is saving money in order to
Q59: Consider a new deposit of $10 000
Q60: Credit cards are considered to be "money
Q62: If all the banks in the banking
Q63: Consider a new deposit of $10 000
Q64: Commercial banks in Canada are prohibited by
Q65: In recent years, the use of debit
Q66: Which of the following is an example
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents