Exhibit 15-2

-Refer to Exhibit 15-2. By how much can this bank alone now increase its lending? Assume a required reserve ratio of 10 percent.

Question

Exhibit 15-2
 
-Refer to Exhibit 15-2. By how much can this bank alone now increase its lending? Assume a required reserve ratio of 10 percent.

Quizplus · Accepted Answer

The bank can increase its lending by the amount of excess reserves it holds. With a required reserve ratio of 10%, if the bank has $1,000 in reserves, it must keep $100 as required reserves, leaving $900 as excess reserves available for lending.

Exhibit 15-2 -Refer to Exhibit 15-2. by How Much Can This Bank