Refer to the information. The $40 billion deposit of currency into checking accounts will create excess reserves of:

Answer the question on the basis of the following information about a banking system: new
currency deposited in the system = $40 billion; legal reserve ratio = 0.20; excess reserves
prior to the currency deposit = $0.

A.  $20 billion.
B.  $32 billion.
C.  $40 billion.
D.  $0.


B.  $32 billion.