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 add ____ to total demand deposits; the added loans that the banking system as a whole could make as a result of the deposit would generate ____ in additional demand deposits.
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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