Best National Bank is subject to a 10 percent required-reserve ratio.If this bank received a new checkable deposit of $1,000,it could make new loans of

Question

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The required reserve ratio is 10%, which means the bank must keep 10% of the new deposit ($1,000) as reserves ($100) and can loan out the rest. Therefore, the bank can make new loans of $900 ($1,000 - $100).

Best National Bank Is Subject to a 10 Percent Required-Reserve