If a Bank That Desires to Hold No Excess Reserves

Multiple Choice

If a bank that desires to hold no excess reserves and has just enough reserves to meet the required reserve ratio of 10 percent receives a deposit of $400 it has a

A) $400 increase in excess reserves and no increase in required reserves.
B) $400 increase in required reserves and no increase in excess reserves.
C) $360 increase in excess reserves and a $40 increase in required reserves.
D) $40 increase in excess reserves and a $360 increase in required reserves.