The following table shows a T-account for Bank A in a new economy.

-Refer to the table above.If the required reserve ratio for Bank A changed to 10 percent,how much more in loans could the bank give out?

Question

The following table shows a T-account for Bank A in a new economy.
 
-Refer to the table above.If the required reserve ratio for Bank A changed to 10 percent,how much more in loans could the bank give out?

Quizplus · Accepted Answer

If the required reserve ratio is 10%, Bank A needs to keep 10% of its deposits as reserves. Assuming the bank's total deposits are $5,500 (since 10% of $5,500 is $550), and if the bank currently has $1,100 in reserves, it can reduce its reserves to $550, freeing up $550 for additional loans.

The Following Table Shows a T-Account for Bank a in a New