Refer to the information provided in Scenario 10.2 below to answer the questions that follow.
SCENARIO 10.2: The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up.
-Refer to Scenario 10.2. If the required reserve ratio were changed to 20%, total loans of Bank No. 2 will change to

Question

Refer to the information provided in Scenario 10.2 below to answer the questions that follow.
SCENARIO 10.2: The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up. 
-Refer to Scenario 10.2. If the required reserve ratio were changed to 20%, total loans of Bank No. 2 will change to

Quizplus · Accepted Answer

With a required reserve ratio of 20%, Bank No. 2 must keep 20% of its deposits as reserves. If it initially has $80,000 in deposits, 20% reserved means $16,000 must be kept in reserve, leaving $64,000 available to be loaned out.

Refer to the Information Provided in Scenario 10