Riley deposits $4,000 cash in her cheque account at Fershur Bank. If the desired reserve ratio is 5 per cent, Fershur Bank's
A) desired reserves increase by $200 and its excess reserves increase by $3,800.
B) assets and liabilities change in opposite directions.
C) desired reserves increase by $4,000.
D) liabilities do not change but its assets increase.
E) excess reserves increase by $4,000.
Correct Answer:
Verified
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