Suppose you deposit $2,000 into Royal Bank and the bank's desired reserve ratio is 10 percent.How does this affect the bank's balance sheet?
A) Reserves rise by $200.
B) Desired reserves rise by $2,000.
C) Deposits rise by $1,000.
D) Excess reserves rise by $1,800.
E) The bank's desired reserve ratio will rise by 10 percent.
Correct Answer:
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