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In September 2007, Regions Bank Held $3 Million in Reserves

Question 170

Multiple Choice

In September 2007, Regions Bank held $3 million in reserves against M1 deposits and made $83 million in loans. Between September 2007 and September 2008, deposits decreased from $114 million to $95 million. If Regions Bank wants to maintain its desired reserve ratio in 2008, it will


A) cannot make more loans.
B) increase its reserves.
C) decrease its reserves.
D) definitely make more loans.

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