Question: 40
(Choose 1 answer)
Suppose that banks desire to hold no excess reserves. If the reserve requirement is 6% percent and a bank
receives a new deposit of $400, it
A. must increase required reserves by $20.
B. will initially see reserves increase by $400.
C. will be able to use this deposit to make new loans amounting to $380.
D. All of the answers are correct.
