Question

Scenario: Money Creation The reserve requirement is 20%. Leroy receives $1,000 as a graduation present and deposits the money in his checking account. The bank does NOT want to hold excess reserves. Reference: Ref 14-5 (Scenario: Money Creation) Look at the scenario Money Creation. Immediately after the deposit, reserves _____ and demand deposits _____ by $1,000. Group of answer choices increase by $1,000; increase decrease by $200; increase decrease by $1,000; decrease increase by $1,000; decrease

Answer 1

Your answer to this question is increased by $1000