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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