Multiple Choice
The following table shows the balance sheet for Poor Baby Bank.
-Refer to the table above.If the required reserve ratio increases to 25 percent,what could Poor Baby Bank do to satisfy the reserve requirements?
A) Nothing. It has enough reserves.
B) Increase its reserves by $3 by liquidating some of its long-term investments.
C) Increase its reserves by $4.50 by borrowing more from other banks.
D) Increase its deposits by $5.
Correct Answer:
Verified
Correct Answer:
Verified
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