Answer questions a and b. a. If a bank had reserves of $30,000 and demand deposits of
Question:
a. If a bank had reserves of $30,000 and demand deposits of $200,000 (and no other deposits), how much could it lend out if it faced a required reserve ratio of
10 percent? _____________
15 percent? _____________
20 percent? _____________
b. If the bank then received a new $40,000 deposit in a customer’s demand deposit account, how much could it now lend out if it faced a required reserve ratio of
10 percent? _____________
15 percent? _____________
20 percent? _____________
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