If a bank had the reserve requirement of 10 percent and excess reserves of $2,000, the largest loan it could legally extend would be:

Name: If a bank had the reserve requirement of 10 percent and excess reserves of $2,000, the largest loan it could legally extend would be:
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Excess reserves are the amount of reserves a bank has beyond the required minimum. Since the bank has excess reserves of $2,000, this is the maximum amount it can lend out without breaching the reserve requirement.

If a Bank Had the Reserve Requirement of 10 Percent