Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Assuming the reserve requirement is 5 percent and that banks have no desire to hold excess reserves , 400TL cash withdrawal has the following impacts:
Deposits contract in entire banking system by 8.000TL.
Reserves of the bank from which cash is withdrawn increase by 400TL.
The bank from which cash is withdrawn needs to increase its reserves by 380TL in order to meet the required reserve ratio.
Deposits of the bank from which cash is withdrawn fall by 400TL.
which answers?
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