-The above table gives the initial balance sheet for Mini Bank. If the bank's desired reserve ratio is 10 percent, it will make
A) more loans.
B) fewer loans.
C) no change in its lending.
D) You cannot predict what the bank will do from this balance sheet without more information.

Question

-The above table gives the initial balance sheet for Mini Bank. If the bank's desired reserve ratio is 10 percent, it will make
A) more loans. 
B) fewer loans. 
C) no change in its lending. 
D) You cannot predict what the bank will do from this balance sheet without more information.

Quizplus · Accepted Answer

Given a desired reserve ratio of 10 percent, the bank will likely make more loans if it currently holds reserves in excess of this ratio, indicating it has excess reserves available to lend out.

-The Above Table Gives the Initial Balance Sheet for Mini