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Question 143

Multiple Choice

Use the following to answer questions:
Suppose that the public holds 50% of the money supply in currency and the reserve requirement is 20%.Banks hold no excess reserves.A customer deposits $6000 in her chequable deposit.
-(Scenario: Holding Cash) Refer to Scenario: Holding Cash.As a result of the deposit,required reserves will increase by:


A) $0.
B) $1200.
C) $3000.
D) $6000.

Correct Answer:

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