Suppose that a bank has $100 million in checkable deposits and the required reserve ratio is 0.1.If the bank has $5 million in excess reserves,then it would be able to lend out

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Quizplus · Accepted Answer

The bank has $5 million in excess reserves, which means it can lend out $5 million more than the required reserves. The required reserves are 0.1 * $100 million = $10 million. So the bank can lend out $5 million + $10 million = $15 million.

Suppose That a Bank Has $100 Million in Checkable Deposits