Question

Suppose the banking system does NOT hold excess reserves and the reserve ratio is 20%. If Samwise deposits $500 of cash into his checking account, the banking system can increase the money supply by:

A) $2,000

B) $2,500

C) $400

D) $5,000

Answer 1

b

Step-by-step explanation:

because the cost of doing is do is lower now that is why samwise his account gonna get increased