Suppose Bank A holds $200 of reserves,has deposits of $1000,and the desired reserve ratio is 20 percent.How many deposits can Bank A create?

Name: Suppose Bank A holds $200 of reserves,has deposits of $1000,and the desired reserve ratio is 20 percent.How many deposits can Bank A create?
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Question

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Bank A has $200 in reserves and a desired reserve ratio of 20%, which means it needs $200 in reserves for its $1000 in deposits. Therefore, it has no excess reserves to create additional deposits.

Suppose Bank a Holds $200 of Reserves,has Deposits of $1000,and