If commercial banks hold checkable deposits of $100,000, reserves of $
If commercial banks hold checkable deposits of $100,000, reserves of $30,000, and the required reserve ratio is 20 percent, what is the maximum additional amount by which the banking system can expand the money supply?
a. $20,000
b. $30,000
c. $50,000
d. $60,000
e. -$50,000
ANSWER
C
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