Republic bank accepts no additional deposits

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Suppose that on Tuesday morning, the Federal Reserve announces that it will conduct an expansionary monetary policy by changing the required reserve ratio from Monday’s value. To expand the money supply, the Fed could set the required reserve ratio at _____ percent. If Republic Bank accepts no additional deposits, then the bank’s excess reserves would be _____.

A. 8...greater than $18,000

B. 10...greater than $18,000

C. 8...less than $18,000

D. 10...less than $18,000

Reference no: EM131092316

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