If a Bank That Desires to Hold No Excess Reserves

question 203

Multiple Choice

If a bank that desires to hold no excess reserves and has just enough reserves to meet the required reserve ratio of 10 percent receives a deposit of $400 it has a

• A)$400 increase in excess reserves and no increase in required reserves.
• B)$400 increase in required reserves and no increase in excess reserves.
• C)$360 increase in excess reserves and a $40 increase in required reserves.
• D)$40 increase in excess reserves and a $360 increase in required reserves.

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