Question: the answer is ''does not change'' please explain it asap :) Assume the commercial banking system has 500TL deposits, 50TL of reserves and 450TL of

the answer is ''does not change'' please explain it asap :)

Assume the commercial banking system has 500TL deposits, 50TL of reserves and 450TL of loans. Assume also that the Central Bank has 100TL in currency in the hands of the public as liabilities. The initial reserve requirement ratio is 10%. If the Central Bank reduces the reserve requirement ratio from 10% to 5% and banks lend to the maximum extent permitted, the high-powered money (monetary base) Select one: a. increases from 500TL to 1000TL b. decreases from 150TL to 125TL c. increases from 100TL to 200TL d. increases from 150TL to 175TL e. does not change

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