A Bank Has Excess Reserves of $1 Million and Makes

A bank has excess reserves of $1 million and makes a new loan for $500,000.If the bank faces a 10% required reserve ratio,by how much could the money supply increase when the loan is made?

A) There will be no change to the money supply.
B) $50,000
C) $5 million
D) $1.5 million
E) $2 million