Question: Need help with this question, thanks Suppose there is a cash drain of 10 percent in the banking system and the commercial banks' desired reserve

Need help with this question, thanks

Suppose there is a cash drain of 10 percent in the banking system and the commercial banks' desired reserve ratio is 2.5 percent. If the Bank of Canada buys $100,000 worth of government bonds from the public, loans issued by commercial banks to the public will eventually change by? A. $800,000 B. $880,000 C. $1,000,000 D. $4,000,000 E. None of the above

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