Suppose the required reserve ratio is 20 percent. a $5 million deposit allows commercial banks to create as much as
a) $25 million.
b) $5 million.
c) $10 million.
d) $1 million.

Option D. $1 million

Step-by-step explanation:

we know that

Reserve Ratio, it is the percentage of deposits which commercial banks are required to keep as cash

Find the 20% of $5 million

20%=20/100=0.20

0.20*5,000,000=$1,000,000

so

$1 million

step-by-step explanation:

hans did not square the 40-unit side; he merely multiplied it by 2.   incorrect.