If a single bank has $25,000 in excess reserves and the desired reserve ratio is 20 percent, what is the maximum this bank can loan?
A)$20,000
B)$25,000
C)$125,000
D)$30,000
E)$5,000

Name: If a single bank has $25,000 in excess reserves and the desired reserve ratio is 20 percent, what is the maximum this bank can loan? A)$20,000 B)$25,000 C)$125,000 D)$30,000 E)$5,000
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Question

Quizplus · Accepted Answer

The bank can loan out all of its excess reserves, which is $25,000, as it is the amount above the required reserves.

If a Single Bank Has $25,000 in Excess Reserves and the Desired