Question Type: MCQ

Question No$.18.$ Mark$/$s: $1\mathrm{.}00|$ Negative Mark$/$s: $0\mathrm{.}00$

Suppose Bank A had no excess reserves yesterday. Today it received a new demand deposit of Rs $5000$ from you. Suppose the required reserves are $10$ percent of demand deposits. The bank holds no excess reserves and households hold no currency $[$i$.$e$.,$ it is a cashless economy$].$ Based on this information, the maximum amount by which the money supply can be increased as a result of your new deposit and Bank A$\text{'}$s new loan is:

$9500$

$4500$

$5000$

Not enough information.