If a bank has $50,000 in excess reserves at the end of a business day and the required reserve ratio is 20 percent, the bank can increase its profits by:
a. keeping the excess reserves
b. loaning out $40,000.
c. loaning out $50,000 to another bank.
d. borrowing $50,000 to remove the excess reserves.
e. keeping $10,000 and depositing $40,000 with the Fed.
c
Economics
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