Initially a bank has a required réserve ratio of 20 percent and no excess reserves. If $5,000 is deposited into the bank, then initially. ceteris paribus, A . Required reserves will increase by $5,000. B .This bank can increase its loans by S5,000 C .This bank can increase its loans by $4,000. D .Total reserves will increase by $4,000.

Initially a bank has a required réserve ratio of 20 percent and no excess reserves. If $5,000 is deposited into the bank, then initially. ceteris paribus, A . Required reserves will increase by $5,000. B .This bank can increase its loans by S5,000 C .This bank can increase its loans by $4,000. D .Total reserves will increase by $4,000.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Monetary System

Section: Chapter Questions

Problem 4PA

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