he Central Bank requires banks to maintain a 10% legal minimum reserve requirement of their deposits, banks lend out all their excess reserves, and deposits stay within banking institutions and are not withdrawn into currency circulation. When Terry received a cash gift of $20,000 that she deposited into her checkable deposit account, what was the full effect on money supply M1? A. increased by $2,000 B. increased by $20,000 C. increased by $200,000 D. cannot be determined E. no change in M1

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