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Question
Bank A has an increase in deposits of $20 million dollars and all bank reserve requirements are 10%. Bank A loans out the full amount of the deposit increase that is allowed. This amount winds up deposited in Bank B. Bank B lends out the full amount possible as well and this amount winds up deposited in Bank C. What is the total increase in deposits resulting from these three banks?
A. $48.00 million
B. $54.20 million
C. $56.33 million
D. $57.10 million
E. $60.00 million
Answer
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