The MBK Bank has $120 million in deposits, $20 million in actual reserves, and a reserve requirement of 10%. The bank can make:

Name: The MBK Bank has $120 million in deposits, $20 million in actual reserves, and a reserve requirement of 10%. The bank can make:
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Question

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The bank needs to maintain 10% of $120 million, which is $12 million, in reserves. Since it has $20 million in actual reserves, it has $8 million more than required, which can be loaned out.

The MBK Bank Has $120 Million in Deposits, $20 Million