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If a bank's reserve requirement is 5%, then $100 of MO will lead to which of...

Question:

If a banks reserve requirement is 5%, then $100 of MO will lead to which of the following as the amount of M1? O $50 O $200

If a bank's reserve requirement is 5%, then $100 of MO will lead to which of the following as the amount of M1? O $50 O $200 O %5 O $2,000 Save and continue

Answers

Solution Mo = $100 Resence Requirement - 5% Mq = Credit multiplier & — Reserne Requirement Mo X 100 x 100 los 100 x 100 = 200

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