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Suppose a bank uses $100 of its excess reserves to make a new loan when the reserve ratio is 20 percent. How does this action

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Suppose a bank uses $100 of its excess reserves to make a new loan when the reserve ratio is 20 percent. How does this action by itself initially change the money supply? Select one: O The money supply increases by $80. O The money supply decreases by $100 O The money supply decreases by $80. O The money supply increases by $100

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