Use the Following to Answer Questions

question 379

Multiple Choice

Use the following to answer questions:
The reserve requirement is 20%.Leroy receives $1000 as a graduation present and deposits the money in his chequing account.The bank does NOT want to hold excess reserves.
-(Scenario: Money Creation) Refer to Scenario: Money Creation.How much of the $1000 deposit is the bank required to keep in reserves?

• A) $1000
• B) $100
• C) $200
• D) $800