If You Deposit $5000 into First Hawkeye Bank, What Will

question 164

Multiple Choice

If you deposit $5000 into First Hawkeye Bank, what will the bank most likely do?

• A) It will eventually increase its required reserves by the reserve ratio times $5000.
• B) It will be able to lend out $5000 times the reserve ratio.
• C) It will initially see reserves increase by $5000 divided by the reserve ratio.
• D) It will be able to lend out $5000.

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