Consider this monopoly commercial bank in an economy where the required reserve ratio is 8% and like our models in class, all monetary activities take place through this bank.

First Commercial Bank
Assets			Liabilities + Net Worth
Reserves	$800,000		$2 million	DDpublic
Required	$200,000		$500,000	Net Worth
Excess	?
Loans	?
Total	$2.5 million		$2.5 million	Total

Group of answer choices

a, be equal to $9,700.You are hired to make suggestions to Imamonopoly to increase its profitability. If Imamonopoly is willing to be super aggressive with its loan strategy, then your advice should be to have Imamonopoly have the final value of Loans

b. be equal to $8,000.

c. increase by $640.

d, increase by $9,700.

e. remain the same as it currently is.

Answer rating: 100% (QA)

The excess reserve and required reserve ratio that you have c... View the full answer