Suppose a Bank Is Exactly Meeting Its Desired Reserve Ratio

question 257

Multiple Choice

Suppose a bank is exactly meeting its desired reserve ratio of 10 percent and a new deposit of $75,000 is made. Immediately after the deposit is made, the bank's unplanned reserves equal

• A) zero.
• B) $7,500.
• C) $67,500.
• D) It is impossible to determine without additional information.