Scenario 10.2
Imagine that Kristy deposits $10,000 of currency into her chequing account deposit at Bank A and that the desired reserve ratio is 20%.
-Refer to Scenario 10.2.As a result of Kristy's deposit, Bank A's reserves immediately increase by

Question

Quizplus · Accepted Answer

When Kristy deposits $10,000 into her chequing account, Bank A's reserves immediately increase by the full amount of the deposit, which is $10,000. This is because the entire deposit is added to the bank's reserves before any loans are made or reserve requirements are considered.

Scenario 10.2 Imagine That Kristy Deposits $10,000 of Currency into Her Chequing