Multiple Choice
Assume that the commercial banking system has checkable deposits of $10 billion and excess reserves of $1 billion at a time when the reserve requirement is 20 percent.If the reserve requirement is now raised to 30 percent, the banking system then has
A) excess reserves of $2 billion.
B) neither an excess nor a deficiency of reserves.
C) a deficiency of reserves of $.5 billion.
D) excess reserves of only $.5 billion.
Correct Answer:
Verified
Correct Answer:
Verified
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