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Assume that a banking system as a whole has a required reserve ratio of 10 percent. If the banking system has demand deposit liabilities of

Assume that a banking system as a whole has a required reserve ratio of 10 percent. If the banking system has demand deposit liabilities of $500 billion and actual reserves of $55 billion, how much money can the banking system create (for simplicity, assume there is no cash leakage from the banking system)?

$20 billion.

$100 billion.

$5 billion.

$50 billion.

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