If the reserve ratio is 10 percent and a bank receives a new deposit of $20, what happens to the bank's reserves in the longer term?
A) increase by $2
B) increase by $18
C) increase by $20
D) increase by $200

Name: If the reserve ratio is 10 percent and a bank receives a new deposit of $20, what happens to the bank's reserves in the longer term? A) increase by $2 B) increase by $18 C) increase by $20 D) increase by $200
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Question

Quizplus · Accepted Answer

The reserve ratio is 10%, so the bank must keep $2 (10% of $20) as reserves.

If the Reserve Ratio Is 10 Percent and a Bank