Multiple Choice
If the reserve ratio is 10 percent and a bank receives a new deposit of $500, which of the following will this bank most likely do?
A) It will increase its required reserves by $5000.
B) It will make new loans of $5000.
C) It will be able to make new loans of $500.
D) It will initially see its total reserves increase by $500.
Correct Answer:
Verified
Correct Answer:
Verified
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