Question

If the Federal Reserve decreases the reserve rate from 5% to 2%, how does this affect the amount of money that would result because of fractional reserve banking from an initial deposit into a bank of $25,000? A. It increases the amount by $500,000. B. It decreases the amount by $750,000. C. It increases the amount by $750,000. D. It decreases the amount by $500,000.