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
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Home » Business » 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