If Bob withdraws $100 from his checking account and the reserve requirement is 10 percent, then:
A) the money supply can decrease by as much as $1000, if banks hold some excess reserves.
B) the money supply can increase by as much as $1000, if banks hold no excess reserves.
C) the money supply can decrease by as much as $100, if banks hold some excess reserves.
D) the money supply can decrease by as much as $1000, if banks hold no excess reserves.
Correct Answer:
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