Table 13.2 ABC Bank Balance Sheet
Refer to Table 13.2.If ABC Bank has a required reserve ratio of 15 percent,it can legally make a onetime maximum loan of

Question

Table 13.2 ABC Bank Balance Sheet
 Refer to Table 13.2.If ABC Bank has a required reserve ratio of 15 percent,it can legally make a onetime maximum loan of

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The required reserve ratio is 15%, which means that ABC Bank must hold 15% of its deposits in reserves and can lend out the rest. The bank's total deposits are $333,000 ($300,000 + $30,000 + $3,000), and 15% of that is $49,950. Therefore, the maximum loan the bank can make is $333,000 - $49,950 = $283,050. Option C ($50,000) is the only amount that is less than this maximum loan amount.