When a bank accepts a checkable deposit from a customer, its deposits will increase and its excess reserves will
A)increase by the same amount as deposits.
B)increase by less than the deposits.
C)increase by more than the deposits.
D)decrease.Blooms: Understand

Question

Quizplus · Accepted Answer

When a bank accepts a checkable deposit, its reserves increase, but not all of it becomes excess reserves because a portion must be held as required reserves. Thus, excess reserves increase by less than the total deposit amount.

When a Bank Accepts a Checkable Deposit from a Customer