If the Reserve Requirement Was 15% and a Bank Customer

question 47

Multiple Choice

If the reserve requirement was 15% and a bank customer makes a deposit of $500, the initial result would be:

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

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