Multiple Choice
Suppose a commercial bank has a target reserve ratio of 1 percent, but has an actual reserve ratio of 0.8 percent. This bank will likely
A) allow fewer cash withdrawals by the bank's customers.
B) maintain its new, higher reserve ratio because it is more profitable.
C) expand its portfolio of loans.
D) buy government securities from the Bank of Canada.
E) contract its portfolio of loans.
Correct Answer:
Verified
Correct Answer:
Verified
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