Scenario 25-2

Imagine that Kristy deposits $10,000 of currency into her checking account deposit at Bank A and that the required reserve ratio is 20%.

-Refer to Scenario 25-2. As a result of Kristy's deposit, Bank A can make a maximum loan of

Question

Scenario 25-2

Imagine that Kristy deposits $10,000 of currency into her checking account deposit at Bank A and that the required reserve ratio is 20%.

-Refer to Scenario 25-2. As a result of Kristy's deposit, Bank A can make a maximum loan of

Quizplus · Accepted Answer

The required reserve ratio is 20%, so Bank A must keep 20% of $10,000 as reserves, which is $2,000. Therefore, the maximum loan Bank A can make is $10,000 - $2,000 = $8,000.

Scenario 25-2 Imagine That Kristy Deposits $10,000 of Currency into Her Checking