The Central Bank requires banks to maintain a 10% legal minimum reserve requirement of their deposits. Bank A with total deposits of $100 million isfully loaned up. This means that Bank A has total reserves of A. 0 B. $10 million C. $1,000 million
The Central Bank requires banks to maintain a 10% legal minimum reserve requirement of their deposits. Bank A with total deposits of $100 million isfully loaned up. This means that Bank A has total reserves of A. 0 B. $10 million C. $1,000 million
Chapter25: Money Creation
Section: Chapter Questions
Problem 18SQ
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The Central Bank requires banks to maintain a 10% legal minimum reserve requirement of their deposits. Bank A with total deposits of $100 million isfully loaned up. This means that Bank A has total reserves of
A. 0
B. $10 million
C. $1,000 million
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