Table 16-3
$$\begin{array} { | c | c | }
\hline \text { Assets } & \text { Liabilities } \
\hline \text { Reserves } \quad \$ 7,000 & \begin{array} { c }
\text { Deposits } \
+ \$ 50,000
\end{array} \
\hline \text { Loans } & \text { Net Worth } \
+ \$ 46,000 & + \$ 3,000 \
\hline
\end{array}$$
-Refer to Table 16-3.Consider the following simplified balance sheet for a bank: If the required reserve ratio is 10 percent,the bank can make a maximum loan of

Question

Table 16-3
 $$\begin{array} { | c | c | } 
\hline \text { Assets } & \text { Liabilities } \
\hline \text { Reserves } \quad \$ 7,000 & \begin{array} { c } 
\text { Deposits } \
+ \$ 50,000
\end{array} \
\hline \text { Loans } & \text { Net Worth } \
+ \$ 46,000 & + \$ 3,000 \
\hline
\end{array}$$
-Refer to Table 16-3.Consider the following simplified balance sheet for a bank: If the required reserve ratio is 10 percent,the bank can make a maximum loan of

Quizplus · Accepted Answer

The bank must keep 10% of deposits as reserves, which is $5,000 (10% of $50,000). With $7,000 in reserves, the bank can loan out $2,000 ($7,000 - $5,000).

Table 16-3 -Refer to Table 16-3