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Suppose You Deposit $2000 into a Bank That Has a Reserve

Question 98

Multiple Choice

Suppose you deposit $2000 into a bank that has a reserve ratio of 0.1.How does this initially affect the bank's balance sheet?


A) Reserves rise by $200.
B) Required reserves rise by $2000.
C) Deposits rise by $1000.
D) Excess reserves rise by $1800.

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