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If the Reserve Requirement Was 15% and a Bank Customer

Question 95

Multiple Choice

If the reserve requirement was 15% and a bank customer makes a deposit of $500, the initial result would be:


A) a $75 increase in required reserves and a $425 increase in excess reserves.
B) a $425 increase in required reserves and a $75 increase in excess reserves.
C) a $75 increase in required reserves and a $3,333 increase in excess reserves.
D) a $3,333 increase in required reserves and a $425 increase in excess reserves.
E) a $3,333 increase in required reserves and zero increase in excess reserves.

Correct Answer:

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