If the average reserve ratio in the banking Candice Butts Macro Quest

Question 44 / 142: If the average reserve ratio in the banking system is 20 percent and the Fed increases bank reserves by $100,000, what will be the total potential increase in the money supply?

A $2 million

B $100,000

C $120,000

D $500,000

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Macroeconomics MCQ

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Candice Butts

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