If the Scotiabank in Waterloo receives a $10,000 deposit, and the desired reserve ratio is 10 percent, how much can the bank loan out? (Assume that before the deposit this bank had reserves exactly equal to its desired reserve ratio.)

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The desired reserve ratio is 10 percent, which means that the bank must keep 10 percent of the deposit as reserves and can loan out the rest. Therefore, the bank can loan out 90 percent of the deposit, which is $9,000 ($10,000 x 0.9).

If the Scotiabank in Waterloo Receives a $10,000 Deposit, and the Desired