When $1 Million Is Deposited at a Bank,the Required Reserve

question 14

Multiple Choice

When $1 million is deposited at a bank,the required reserve ratio is 20 percent,and the bank chooses not to make any loans but to hold excess reserves instead,then,in the bank's final balance sheet

• A)the assets at the bank increase by $1 million.
• B)the liabilities of the bank decrease by $1 million.
• C)reserves increase by $200,000.
• D)liabilities increase by $200,000.