The accompanying balance sheet is for the First Federal Bank. Assume the required reserve ratio is 20 percent. If the original bank balance sheet was for the whole commercial banking system rather than a single bank, loans
And deposits could have been expanded by a maximum of
A) $40,000.
B) $100,000.
C) $200,000.
D) $300,000.

Question

The accompanying balance sheet is for the First Federal Bank. Assume the required reserve ratio is 20 percent. If the original bank balance sheet was for the whole commercial banking system rather than a single bank, loans
And deposits could have been expanded by a maximum of
A) $40,000. 
B) $100,000. 
C) $200,000. 
D) $300,000.

Quizplus · Accepted Answer

The Answer of  The accompanying balance sheet is for the First Federal Bank. Assume the required reserve ratio is 20 percent. If the original bank balance sheet was for the whole commercial banking system rather than a single bank, loans
And deposits could have been expanded by a maximum of
A) $40,000. 
B) $100,000. 
C) $200,000. 
D) $300,000.

The Accompanying Balance Sheet Is for the First Federal Bank