The Fed Changes Reserve Requirements from 10% to 7%, Thereby

Multiple Choice

The Fed changes reserve requirements from 10% to 7%, thereby creating $900 million in excess reserves. The total change in deposits (with no drains) would be

A) $3,000 million.
B) $15,625 million.
C) $12,857 million.
D) $3,795 million.
E) none of the above. (1/0.07)  $900 million