DSE 19-28

The following table shows the balane sheet of Country A’s banking system. The money supply in Country A is $2 800 and all banks do not hold excess reserves.

Suppose the public deposits $200 cash into the banking system. Which of the following statements about the banking is correct after the deposit creation process is completed?

A. The deposits would increase by $3 000.

B. The money supply would increase by $1 000.

C. The monetary base would increase by $200.

D. The loans would increase by $800.