Scenario 14-2
Imagine that Kristy deposits $10,000 of currency into her checking account deposit at Bank A and that the required reserve ratio is 20%.
-Refer to Scenario 14-2.As a result of Kristy's deposit,Bank A can make a maximum loan of

Question

Quizplus · Accepted Answer

The required reserve ratio is 20%, which means that Bank A is required to hold back 20% of Kristy's deposit as reserves, leaving only 80% available for lending. Therefore, Bank A can make a maximum loan of $8,000 ($10,000 x 0.8 = $8,000).

Scenario 14-2 Imagine That Kristy Deposits $10,000 of Currency into Her Checking