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Suppose a commercial bank has a target reserve ratio of 0.8 percent, but has an actual reserve ratio of 0.6 percent. This bank will likely

Suppose a commercial bank has a target reserve ratio of 0.8 percent, but has an actual reserve ratio of 0.6 percent. This bank will likely

a) contract its portfolio of loans.

b) allow fewer cash withdrawals by the bank's customers.

c) expand its portfolio of loans.

d) maintain its new, lower reserve ratio because it is more profitable. e) buy government securities from the Bank of Canada.

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