Multiple Choice
If the reserve requirement is 10 percent and banks desire to hold no excess reserves, when a bank receives a new deposit of $100,
A) it must increase its required reserves by $10.
B) its total reserves initially increase by $10.
C) it will be able to make new loans up to a maximum of $10.
D) None of the above is correct.
Correct Answer:
Verified
Correct Answer:
Verified
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