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Suppose a Bank Has $600,000 in Deposits, a Reserve Ratio

Question 95

Multiple Choice

Suppose a bank has $600,000 in deposits, a reserve ratio of 20 percent, and bank reserves of $240,000. This bank can make new loans in the amount of

A) $840,000.
B) $360,000.
C) $120,000.
D) $12,000.

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