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Initially a Bank Has a Minimum Reserve Requirement of 15

Question 64

Multiple Choice

Initially a bank has a minimum reserve requirement of 15 percent and no excess reserves.If $200,000 is deposited in the bank,then ceteris paribus:


A) The bank can increase its loans by $30,000.
B) The bank can increase its loans by $230,000.
C) Excess reserves will increase by $170,000.
D) Required reserves will increase by $200,000.

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