Multiple Choice
Suppose a bank has a desired reserve requirement ratio of 12 percent. If someone deposits $1,000 in the bank,
A) the bank can make loans of $1,000.
B) the bankʹs desired reserves rise by $1,000.
C) immediately after the deposit, excess reserves increase by $880.
D) Both answers B and C are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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