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Question
If the Central Bank of Macroland puts an additional 1,000 dollars of currency into the economy, the public deposits all currency into the banking system, and banks have a desired reserve/deposit ratio of 0.10, then the banks will eventually make new loans totaling ______ and the money supply will increase by _______.A. $1,000; $1,000
B. $9,000; $9,000
C. $9,000; $10,000
D. $1,000; $9,000
Answer
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