If a Bank Has $200,000 of Demand Deposits, a Desired

question 70

Multiple Choice

If a bank has $200,000 of demand deposits, a desired reserve ratio of 20 percent, and it holds $80000 in reserves, then the maximum deposit outflow it can sustain without altering its balance sheet is ________.

• A) $50000
• B) $40000
• C) $30000
• D) $25000

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