Multiple Choice
Suppose you found $10,000 hidden under a rock and deposited it in a demand deposit account at your bank. If the reserve requirement was 20 percent, your deposit would initially add ____ to total demand deposits and over time increase the money supply by a maximum of ____.
A) $2,000; $4,000
B) $2,000; $40,000
C) $10,000; $40,000
D) $10,000; $50,000
Correct Answer:
Verified
Correct Answer:
Verified
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