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?

a.It increases the amount by $400,000.

b.It decreases the amount by $400,000.

c.It decreases the amount by $100,000.

d.It increases the amount by $100,000.

Respuesta :

If the Federal Reserve decreases the reserve rate from 10% to 8%,the affected amount of money that would result because of fractional-reserve banking from an initial deposit into a bank of $40,000 would be $8000.


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