Suppose a commercial banking system has $100 000 of outstanding demand deposits and actual reserves of $35 000. | Cheap Nursing Papers
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Suppose a commercial banking system has $100 000 of outstanding demand deposits and actual reserves of $35 000.

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Suppose a commercial banking system has $100 000 of outstanding demand deposits and actual reserves of $35 000. If the reserve ratio is 20%, the banking system can expand the supply of money by a maximum amount of: 

A. 

$122 000.

B. 

$175 000.

C. 

$300 000.

D. 

$75 000.

Explain your answer.

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