Multiple Choice
If the reserve requirement is 7 percent, a bank desires to hold no excess reserves, and it receives a new deposit of $300, it
A) must increase required reserves by $42.
B) will initially see reserves decrease by $300.
C) will be able to use this deposit to make new loans amounting to $300.
D) must increase required reserves by $21.
Correct Answer:
Verified
Correct Answer:
Verified
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