If a bank has $6 billion in reserves and loans $2 billion to another bank,then the total quantity of reserves demanded is ________.
A) $2 billion
B) $4 billion
C) $6 billion
D) $8 billion

Question

Quizplus · Accepted Answer

The total quantity of reserves demanded would still be $6 billion because the lending bank would now hold the $2 billion loan as reserves, leaving the total quantity of reserves unchanged.

If a Bank Has $6 Billion in Reserves and Loans