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Consider an Economy with a Fractional Reserve Banking and No

Question 67

Multiple Choice

Consider an economy with a fractional reserve banking and no currency held by public.If the monetary base is $1,000,000 and the reserve-deposit ratio 0.1,the money supply is


A) $ 5,000,000
B) $100,000
C) $900,000
D) $10,000,000

Correct Answer:

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