Suppose There Is a Bank Panic

question 204

Multiple Choice

Suppose there is a bank panic.Which of the following would not be a consequence of this bank panic?

• A)Bank total reserves would decrease.
• B)Required reserves would increase.
• C)Bank checking account balances would decrease.
• D)Individual banks would have to shrink the value of loans they made.
• E)The economy would likely enter into a recession.

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