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The Potential Amount of Money That the Banking System Generates

Question 79

Multiple Choice

The potential amount of money that the banking system generates with each dollar of reserves is given by the product of:


A) excess reserves times the money multiplier.
B) initial deposit times the money multiplier.
C) actual reserves times the required reserve ratio.
D) required reserves times the money multiplier.
E) initial deposit times the required reserve ratio.

Correct Answer:

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