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If the Reserve Requirement Was 5% and a Bank Customer

Question 119

Multiple Choice

If the reserve requirement was 5% and a bank customer makes a deposit of $1,000, the initial result would be:


A) ​a $950 increase in required reserves and a $50 increase in excess reserves.
B) ​a $20,000 increase in required reserves and a $950 increase in excess reserves.
C) ​a $50 increase in required reserves and a $20,000 increase in excess reserves.
D) ​none of the above

Correct Answer:

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