Question 1.lf the reserve requirement is 100 percent, and banks keep no excess reserves, a new deposit of $2,000 will add to the money supply:

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter25: Money, Banking, And The Federal Reserve System
Section: Chapter Questions
Problem 13P
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Question 1.lf the reserve requirement is 100
percent, and banks keep no excess
reserves, a new deposit of $2,000 will add
to the money supply:
A. Zero
В. 2,000
C. $20,000
D. $200,000
Question 2. If the reserve requirement is 10
percent, and banks keep no excess
reserves, a new deposit of $2,000 will add
to the money supply:
A. Zero
В. 2,000
C. $20,000
D. $200,000
Transcribed Image Text:Question 1.lf the reserve requirement is 100 percent, and banks keep no excess reserves, a new deposit of $2,000 will add to the money supply: A. Zero В. 2,000 C. $20,000 D. $200,000 Question 2. If the reserve requirement is 10 percent, and banks keep no excess reserves, a new deposit of $2,000 will add to the money supply: A. Zero В. 2,000 C. $20,000 D. $200,000
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