Option 1: Evaluate the following statement: "Since any bank can only lend out its excess reserves, an increase in the monetary base that provides banks with excess reserves leads to a dollar for dollar increase in the money supply through bank lending." Option 2: Evaluate the following statement: "Banks must walk a tightrope between liquidity and profitability because the prudent policies such as holding lots of reserves that maintain liquidity reduce profitability." Option 3: In what way is it true that "banks make money by making money"
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