Question: I will be glad if you explain it :) Assume the commercial banking system has 500TL deposits, 50TL of reserves and 450TL of loans. Assume

I will be glad if you explain it :)

Assume the commercial banking system has 500TL deposits, 50TL of reserves and 450TL of loans. Assume also that the Central Bank has 100TL in currency in the hands of the public as liabilities. The initial reserve requirement ratio is 10%. If the Central Bank reduces the reserve requirement ratio from 10% to 5% and banks lend to the maximum extent permitted, banks' loans will: Select one: a. increase from 450TL to 950TL b. increase from 450TL to 1000TL c. not change d. decrease from 450TL to 300TL e. decrease from 450TL to 100TL

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