When $1 million is deposited at a bank, the required reserve ratio is 20 percent, and the
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Question:
When $1 million is deposited at a bank, the required reserve ratio is 20 percent, and the bank chooses not to make any loans but to hold excess reserves instead, then, in the bank's final balance sheet
A) the assets at the bank increase by $1 million.
B) the liabilities of the bank decrease by $1 million.
C) reserves increase by $200,000.
D) liabilities increase by $200,000.
Expert Answer:
Answer The correct option is A the assets at the bank increase by 1 million ... View the full answer
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