If we focus on the banking system and assume no change in the public's currency holdings, a loss of reserves by any one bank must:
A. Equal the loss of reserves by the entire system.
B. Be equal to the net loss of reserves for the banking system.
C. Will result in no change in reserves for the banking system.
D. None of the above.
Answer:C
If we focus on the banking system and assume no change in the public's currency holdings, a loss of reserves by any one bank must:
A. Equal the loss of reserves by the entire system. B. Be equal to the net loss of reserves for the banking system. C. Will result in no change in reserves for the banking system. D. None of the above.