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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)
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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

User Ravikant Mane
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1 Answer

2 votes

Answer:

b

Step-by-step explanation:

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

User Sergii Zhuravskyi
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6.1k points
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