Multiple Choice
Suppose a bank has $100,000 in checking account deposits with no excess reserves and the required reserve ratio is 5 percent.If the Federal Reserve lowers the required reserve ratio to 3 percent,then the bank will now have excess reserves of
A) $0.
B) $2,000.
C) $3,000.
D) $5,000.
Correct Answer:
Verified
Correct Answer:
Verified
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