$\begin{array}{l|l}\text { Assets }&\text { Liabilities }\
\hline
\text { Total reserves }\quad\$100,000&\text { Transactions accounts }\quad\$400,000\
\text { Loans }\quad300,000
\end{array}$

Table 13.1
XYZ Bank Balance Sheet Refer to Table 13.1.If XYZ Bank has a required reserve ratio of 10 percent and loan proceeds are not redeposited,it can legally increase its loans by

Question

$\begin{array}{l|l}\text { Assets }&\text { Liabilities }\
\hline 
\text { Total reserves }\quad\$100,000&\text { Transactions accounts }\quad\$400,000\
\text { Loans }\quad300,000
\end{array}$

Table 13.1
XYZ Bank Balance Sheet Refer to Table 13.1.If XYZ Bank has a required reserve ratio of 10 percent and loan proceeds are not redeposited,it can legally increase its loans by

Quizplus · Accepted Answer

The required reserves are $40,000 (10% x $400,000). The excess reserves are $60,000 ($100,000 - $40,000). The bank can legally increase its loans by $60,000.

Table 131 XYZ Bank Balance Sheet Refer to Table 13

Table 131
XYZ Bank Balance Sheet Refer to Table 13