Question

If the reserve ratio is 5 percent, then $500 of additional reserves can create up to a. $9,500 of new money. b. $2,500 of new money. c. $10,500 of new money. d. $10,000 of new money. 1 points QUESTION 67

Answer 1

Divide the additional reserve by the percent:

$500 / 0.05 = $10,000

The answer is D.