Question 8 of 10
If the Federal Reserve decreases the reserve rate from 10% to 8%, how does
this affect the amount of
money that would result because of fractional-
reserve banking from an initial deposit into a bank of $40,000?
C A. It increases the amount by $100,000.
•
B. It decreases the amount by $400,000.
•
C. It increases the amount by $400,000.
• D. It decreases the amount by $100,000.
