Deposit multiplier question


Problem: If banks hold a 30 percent reserve ratio, an initial increase in bank reserves of $30 will lead to an eventual:

A) increase in the money supply of $180.

B) increase in the money supply of $90.

C) increase in the money supply of $100.

D) increase in loans of $100.

E) increase in loans of $90.

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Macroeconomics: Deposit multiplier question
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