If the Actual Reserve/deposit Ratio Equals 8% and the Desired

question 2

Multiple Choice

If the actual reserve/deposit ratio equals 8% and the desired reserve/deposit ratio for this bank is 10%, the bank should:

• A) do nothing because this is a profitable situation.
• B) stop making loans.
• C) send the extra reserves to the central bank.
• D) make more loans in order to earn interest.

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