Exhibit 15-7 Lower Walloon National Bank

Exhibit 15-7 Lower Walloon National Bank

In Exhibit 15-7, if the required reserve ratio is 20 percent for all banks, and every bank in the banking system loans out all of its excess reserves. Then a $10,000 deposit from Mr. Brown in checkable deposits could create for the entire banking system:

A) $8,000 worth of new money.
B) $2,000 worth of new money.
C) $10,000 worth of new money.
D) $40,000 worth of new money.