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Banking system of upperland

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Reference no: EM131166930

Please note: I've already asked this question and gotten the answer from 3 tutors, but they did not explain how they got the answer (Please show the math and  ow you get to the answer, otherwise I will not be able to do this kind of question on the exam) The answer is e) 37.5 million

Suppose that the banking system of Upperland has excess reserves of $50 million, the desired reserve ratio is 25 percent, and the currency drain ratio is 50 percent. By how much will the quantity of money increase?

Select one:

a. 100 millionb. $50 millionc. $12.5 milliond. $25 millione. $37.5 million

Reference no: EM131166930

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