Multiple Choice
If the required reserve ratio is 10 percent and a bank receives a new deposit for $100,000,then the:
A) bank must keep $5,000 in excess reserves.
B) bank's required reserves increase by $45,000.
C) bank's liabilities increase by $100,000.
D) bank can increase its loans by up to $50,000.
E) bank can increase its loans by up to $400,000.
Correct Answer:
Verified
Correct Answer:
Verified
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