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When the reserve ratio increases (for example from 0.10 to 0.12): desired reserves are changed into excess reserves the excess reserves of banks are increased

When the reserve ratio increases (for example from 0.10 to 0.12):

desired reserves are changed into excess reserves

the excess reserves of banks are increased

a single bank can no longer lend dollar-for-dollar with its excess reserves

excess reserves are turned into desired reserves

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