The Commercial Banking System, Because of a Recent Change in the Required

question 272

Multiple Choice

The commercial banking system, because of a recent change in the required reserve ratio from 8 percent to 10 percent, finds that it is $50 million short of reserves. If it is unable to obtain any additional reserves, it must reduce
Deposits and money supply by

• A) $250 million.
• B) $625 million.
• C) $500 million.
• D) $50 million.