The commercial banking system, because of a recent change in the required reserve ratio from 8 percent to 10 percent, finds that it is $50 million short of reserves.If it is unable to obtain anyadditional reserves, it mustreduce deposits andmoney supply by
A)$250 million.
B)$625 million.
C)$500 million.
D)$50 million.

Question

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The Answer of The commercial banking system, because of a recent change in the required reserve ratio from 8 percent to 10 percent, finds that it is $50 million short of reserves.If it is unable to obtain anyadditional reserves, it mustreduce deposits andmoney supply by
A)$250 million.
B)$625 million.
C)$500 million.
D)$50 million.

The Commercial Banking System, Because of a Recent Change in the Required