Scenario 25-2

Imagine that Kristy deposits $10,000 of currency into her checking account deposit at Bank A and that the required reserve ratio is 20%.

-Refer to Scenario 25-2. As a result of Kristy's deposit, Bank A's required reserves increase by

Question

Scenario 25-2

Imagine that Kristy deposits $10,000 of currency into her checking account deposit at Bank A and that the required reserve ratio is 20%.

-Refer to Scenario 25-2. As a result of Kristy's deposit, Bank A's required reserves increase by

Quizplus · Accepted Answer

The required reserve ratio is 20%, so Bank A must hold 20% of Kristy's $10,000 deposit as reserves. Therefore, the required reserves increase by $10,000 * 0.20 = $2,000.

Scenario 25-2 Imagine That Kristy Deposits $10,000 of Currency into Her Checking