Suppose First Rhode Island Bank of Commerce faces a reserve requirement ratio of 15 percent. If a customer makes a deposit of $500, the initial result would be:
A) a $425 increase in excess reserves.
B) a $75 increase in excess reserves.
C) a $3,333 increase in excess reserves.
D) a $3,333 increase in required reserves.
E) a $100 increase in required reserves.
Correct Answer:
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