Suppose Bank a Holds $200 of Reserves, Has Deposits of $1000

question 245

Multiple Choice

Suppose Bank A holds $200 of reserves, has deposits of $1000, and the desired reserve ratio is 20 percent. How many deposits can Bank A create?

• A) zero, because Bank A has no excess reserves
• B) $850
• C) $200
• D) $50

Learn how to calculate the standard deviation of a portfolio's returns.

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