Suppose a commercial bank has a target reserve ratio of 1%,but has an actual reserve ratio of 0.8%.This bank will likely
A) expand its portfolio of loans.
B) contract its portfolio of loans.
C) maintain its new,higher reserve ratio because it is more profitable.
D) buy government securities from the Bank of Canada.
E) allow fewer cash withdrawals by the bank's customers.
Correct Answer:
Verified
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