If the banking system has demand deposits of $100,000,total reserves equal to $20,000,and a required reserve ratio of 20 percent,the banking system can increase the volume of loans by

Question

Quizplus · Accepted Answer

The banking system is already holding reserves equal to the required reserve ratio (20% of $100,000 is $20,000), so it cannot increase the volume of loans further without additional deposits.

If the Banking System Has Demand Deposits of $100,000,total Reserves