Table 16-3
$\begin{array}{|c|c|}
\hline \text { Assets } & \text { Liabilities } \
\hline \text { Reserves }+\$ 7,000 & \text { Deposits }+\$ 50,000 \
\hline \text { Loans }+\$ 46,000 & \text { Net Worth }+\$ 3,000 \
\hline
\end{array}$
-Refer to Table 16-3.Consider the above simplified balance sheet for a bank.If the required reserve ratio is 10 percent,the bank can make a maximum loan of

Question

Table 16-3
 $\begin{array}{|c|c|}
\hline \text { Assets } & \text { Liabilities } \
\hline \text { Reserves }+\$ 7,000 & \text { Deposits }+\$ 50,000 \
\hline \text { Loans }+\$ 46,000 & \text { Net Worth }+\$ 3,000 \
\hline
\end{array}$
-Refer to Table 16-3.Consider the above simplified balance sheet for a bank.If the required reserve ratio is 10 percent,the bank can make a maximum loan of

Quizplus · Accepted Answer

The bank must keep 10% of deposits as reserves, which is $5,000 (10% of $50,000). With $7,000 in reserves, the bank has $2,000 in excess reserves, which can be loaned out.

Table 16-3 -Refer to Table 16-3