-In the balance sheet above, the entries are in millions of dollars for the FBN Bank. After FBN Bank loans the maximum amount it can, the loans have been spent, and the proceeds have been deposited in other banks, FBN Bank has excess reserves of
A) $100 million.
B) $200 million.
C) $300 million.
D) $0.

Question

-In the balance sheet above, the entries are in millions of dollars for the FBN Bank. After FBN Bank loans the maximum amount it can, the loans have been spent, and the proceeds have been deposited in other banks, FBN Bank has excess reserves of
A) $100 million. 
B) $200 million. 
C) $300 million. 
D) $0.

Quizplus · Accepted Answer

After lending the maximum amount possible, FBN Bank would have no excess reserves left, as all available reserves would be utilized for loans.

-In the Balance Sheet Above, the Entries Are in Millions