If the Reserve Requirement Is 5 Percent, a Bank Desires

Multiple Choice

If the reserve requirement is 5 percent, a bank desires to hold no excess reserves, and it receives a new deposit of $400, it

A) must increase required reserves by $20.
B) will initially see reserves increase by $400.
C) will be able to use this deposit to make new loans amounting to $380.
D) All of the above are correct.