Assume that the commercial banking system has checkable deposits of $10 billion and excess reserves of $1 billion at a time when the reserve requirement is 20%. If the reserve requirement is now raised to 30%, the banking system then has ________.
A. excess reserves of only $.5 billion
B. excess reserves of $2 billion
C. a deficiency of reserves of $.5 billion
D. neither an excess nor a deficiency of reserves
Answer: D
Economics
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a. True b. False
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