Atlantic Bank is required to hold 10% of deposits as reserves. If the central bank increases the discount rate, how would Atlantic Bank respond?
A. by noting a decrease in net worth
B. by increasing its reserves
C. its balance sheet will be unchanged
D. it can make more loans with increased loan assets
Answer:B
Atlantic Bank is required to hold 10% of deposits as reserves. If the central bank increases the discount rate, how would Atlantic Bank respond?
A. by noting a decrease in net worth B. by increasing its reserves C. its balance sheet will be unchanged D. it can make more loans with increased loan assets
Explanation: Type: Multiple Choice