?

AP® Macroeconomics

Free Version

Upgrade subject to access all content

Difficult

Money Multiplier and Excess Reserves

APMACR-161FLN

If the Required Reserve is 20%, then what is the maximum increase in the money supply if a person deposits $100 into a checking account at a member bank of the Federal Reserve that had no excess reserves before the deposit?

A

$1000

B

$500

C

$400

D

$100

E

No change