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A Bank's Checkable Deposits Shrink from $40 Million to $33

Question 183

Multiple Choice

A bank's checkable deposits shrink from $40 million to $33 million. What happens to its required reserves if the required reserve ratio is 3 percent?

A) They fall by about $1.2 million.
B) They fall by about $10 million.
C) They fall by about $7 million.
D) They fall by about $0.2 million.

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