Suppose a bank has a 10 percent reserve ratio,$3000 in deposits,and it loans out all it can,given the reserve ratio.Which of the following describes the bank's assets?
A) It has $30 in reserves and $2700 in loans.
B) It has $30 in reserves and $2970 in loans.
C) It has $300 in reserves and $2700 in loans.
D) It has $300 in reserves and $3000 in loans.

Question

Quizplus · Accepted Answer

The bank must keep 10% of $3000 in reserves, which is $300. The remaining $2700 can be loaned out.

Suppose a Bank Has a 10 Percent Reserve Ratio,$3000 in Deposits,and