Table 25-2

-Refer to Table 25-2. Suppose a transaction changes a bank's balance sheet as indicated in the following T-account, and the required reserve ratio is 10 percent. As a result of the transaction, the bank can make a maximum loan of

Question

Table 25-2
 
-Refer to Table 25-2. Suppose a transaction changes a bank's balance sheet as indicated in the following T-account, and the required reserve ratio is 10 percent. As a result of the transaction, the bank can make a maximum loan of

Quizplus · Accepted Answer

The bank's reserves increase by $8,000, and with a required reserve ratio of 10%, it must keep $800 in reserves. Therefore, it can loan out the remaining $7,200.

Table 25-2 -Refer to Table 25-2. Suppose a Transaction Changes a Bank's