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Demand for loans leads

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If $1,000 in reserves is added to the banking system that has a required reserve ratio of 20%, and the demand for loans leads to no excess reserves being left in the system, by how much will the money supply increase?

  • $1,000
  • $200
  • $2,000
  • $5,000
  • $10,000

Reference no: EM131040212

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