Multiple Choice
In September 2017, Regions Bank had its desired reserve ratio when it held $3 million in reserves against M1 deposits and made $83 million in loans. Between September 2017 and September 2018, deposits decreased from $114 million to $95 million. If Regions Bank wants to maintain its desired reserve ratio in 2018, it will
A) increase its reserves.
B) definitely make more loans.
C) cannot make more loans.
D) decrease its reserves.
Correct Answer:
Verified
Correct Answer:
Verified
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