Table 10.3
-Refer to Table 10.3.Consider the following simplified balance sheet for a bank: If the desired reserve ratio is 10 percent, the bank can make a maximum loan of

Question

Table 10.3 
-Refer to Table 10.3.Consider the following simplified balance sheet for a bank: If the desired reserve ratio is 10 percent, the bank can make a maximum loan of

Quizplus · Accepted Answer

The maximum loan amount is determined by the excess reserves the bank has available to lend out. If the desired reserve ratio is 10%, the bank needs to keep 10% of its deposits as reserves. The maximum loan amount is the difference between the actual reserves and the required reserves (10% of deposits). Without the specific numbers from the balance sheet, we can't calculate the exact figures, but the principle is that the bank can lend out any reserves in excess of the required reserves. Given the options, $2,000 is the correct choice based on the information provided.

Table 10.3 -Refer to Table 10.3.Consider the Following Simplified Balance Sheet for Balance