If the reserve ratio is 20 percent and a bank receives a new checkable deposit of $100, this bank
a. must increase required reserves by $20.
b. will initially see its total reserves increase by $200.
c. will be able to make new loans up to a maximum of $20.
d. will be allowed to make new loans of up to $100.
e. all of the above are true.
a. must increase required reserves by $20.
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Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D2 and S2 (point E)
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