Suppose Bank ABC Has a Target Reserve Ratio of 10%,no

question 56

Multiple Choice

Suppose Bank ABC has a target reserve ratio of 10%,no excess reserves,and it receives a new deposit of $500 000.This bank will initially expand its loans by

• A)$50 000.
• B)$450 000.
• C)$500 000.
• D)$4.5 million.
• E)$5 million.

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