Multiple Choice
If at the end of the business day a bank has $50,000 in excess reserves,and the required reserve ratio is 20 percent,the bank can maximize its profits if it
A) keeps the excess reserves
B) loans out $40,000
C) loans $50,000 to another bank
D) borrows $50,000 to remove the excess reserves
E) keeps $10,000 and deposits $40,000 with the Fed
Correct Answer:
Verified
Correct Answer:
Verified
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