Within a banking system, every bank holds 20% of deposits in cash. A single bank then takes in a fresh cash deposit of $200. If the net cash withdrawals from the banking system after that are zero, what increase will result in bank loans, and what will be the total rise in bank deposits?
- Aincrease in bank loans $160; total increase in deposits $200
- Bincrease in bank loans $160; total increase in deposits $360
- Cincrease in bank loans $800; total increase in deposits $1000
- Dincrease in bank loans $1000; total increase in deposits $1000