Suppose First Rhode Island Bank of Commerce Faces a Reserve

question 82

Multiple Choice

Suppose First Rhode Island Bank of Commerce faces a reserve requirement ratio of 15 percent. If a customer makes a deposit of $500, the initial result would be:

• A)a $425 increase in excess reserves.
• B)a $75 increase in excess reserves.
• C)a $3,333 increase in excess reserves.
• D)a $3,333 increase in required reserves.
• E)a $100 increase in required reserves.

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Definitions:

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