Multiple Choice
If you deposit $5000 into First Hawkeye Bank, what will the bank most likely do?
A) It will eventually increase its required reserves by the reserve ratio times $5000.
B) It will be able to lend out $5000 times the reserve ratio.
C) It will initially see reserves increase by $5000 divided by the reserve ratio.
D) It will be able to lend out $5000.
Correct Answer:
Verified
Correct Answer:
Verified
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