Suppose Banks Desire to Hold No Excess Reserves and That

question 17

Multiple Choice

Suppose banks desire to hold no excess reserves and that the Fed has set a reserve requirement of 6 percent.If you deposit $8,000 into First Raven Bank,

• A)First Raven's required reserves increase by $480.
• B)First Raven will be able to lend out $7,520.
• C)First Raven's assets and liabilities both will increase by $8,000.
• D)All of the above are correct.