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      Question

      New loans made = 1000. Fractional reserve ratio is 1/3,

      by how much deposits will grow?
      A 3000 Correct Answer Incorrect Answer
      B 300 Correct Answer Incorrect Answer
      C 5000 Correct Answer Incorrect Answer
      D 6000 Correct Answer Incorrect Answer
      E None of these Correct Answer Incorrect Answer

      Solution

      Deposits will grow by 1000 / (1/3) = 3000

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