1996EconomicsMedium
Suppose Imtiaz moves his Rs1,000 demand deposit from Bank A to Bank B. If both banks operate with a reserve ratio of 10 percent What is the potential change in money supply as a result of Gerard’s action?
ARs 1,000
BRs 0
CRs 9,000
DRs 10,00
Correct answer
B. Rs 0
Explanation
The correct answer is Rs 0.