The ZKL Bank has $200 million in deposits, $60 million in actual reserves and $40 million in required reserves. The bank can make new loans of:

Name: The ZKL Bank has $200 million in deposits, $60 million in actual reserves and $40 million in required reserves. The bank can make new loans of:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The bank can make new loans of the amount it has in excess reserves, which is the difference between actual reserves and required reserves. Here, that's $60 million - $40 million = $20 million.

The ZKL Bank Has $200 Million in Deposits, $60 Million