Suppose a bank's desired reserve ratio is 15 percent, and the bank acquires new deposits of $100,000.What is the maximum amount the bank can lend from these new deposits?

Question

Quizplus · Accepted Answer

The bank's desired reserve ratio is 15 percent, so it must keep 15 percent of the $100,000 deposit as reserves. Therefore, the maximum amount the bank can lend from these new deposits is $85,000 ($100,000 - 15% x $100,000 = $85,000).

Suppose a Bank's Desired Reserve Ratio Is 15 Percent, and the Bank