Suppose Banks Desire to Hold No Excess Reserves and That

question 103

Multiple Choice

Suppose banks desire to hold no excess reserves and that the Fed has set a reserve requirement of 10 percent. If you deposit $9,000 into First Jayhawk Bank,

• A)First Jayhawk's required reserves increase by $900.
• B)First Jayhawk will be able to lend out $8,100.
• C)First Jayhawk's assets and liabilities both will increase by $9,000.
• D)All of the above are correct.