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Suppose the required reserve ratio is 20 percent. A $5 million deposit allows commercial banks to create as much as
a) $25 million.
b) $5 million.
c) $10 million.
d) $1 million.

Respuesta :

calculista

Answer:

Option D. $1 million

Step-by-step explanation:

we know that

Reserve Ratio, it is the percentage of deposits which commercial banks are required to keep as cash

Find the 20% of $5 million

20%=20/100=0.20

0.20*5,000,000=$1,000,000

so

$1 million

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