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Sagot :
The statement "the money supply should increase by lower of $3 billion is correct.
The calculation is shown below:
Reserve requirement should be
= 10% of 3 million
= 0.3 million
Now
Excess reserve should be
= 3 - 0.3
= 2.7 million
Since Required reserve ratio = 10%
Now
Money multiplier is
= 1 ÷ Required reserve ratio
= 1 ÷ 0.10
= 10
So,
Increase in money supply should be
= 2.7 million × 10
= $2.7 billion.
So, the rest of the options should be incorrect.
Therefore we can conclude that the statement "the money supply should increase by lower of $3 billion is correct.
Learn more about the money supply here: brainly.com/question/1099440

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