Suppose the Excess Reserves in Eastern Bank Increase by $700

question 32

Multiple Choice

Suppose the excess reserves in Eastern Bank increase by $700.Given a desired reserve ratio of 2.5% and no cash drain,the maximum change in deposits for the entire banking system would be

• A)$682.50.
• B)$700.00.
• C)$17 500.00.
• D)$28 000.00.
• E)$70 000.00.