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    Exam 8: Money, the Price Level, and Inflation
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    Suppose Bank a Holds $200 of Reserves, Has Deposits of $1000
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Suppose Bank a Holds $200 of Reserves, Has Deposits of $1000

Question 398

Question 398

Multiple Choice

Suppose Bank A holds $200 of reserves, has deposits of $1000, and the desired reserve ratio is 20 percent. How many deposits can Bank A create?


A) zero, because Bank A has no unplanned reserves
B) $200
C) $800
D) $400

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