The Fed can set the ratio of legally required reserves between the limits of 8 and 14 percent on checkable deposits.Hence,the maximum multiple by which the banking system could theoretically expand a dollar of excess reserves would vary between
A) 2 and 3.
B) 5 and 6.
C) 8 and 14.
D) 12 and 7.
E) 14 and 6.
Correct Answer:
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