Multiple Choice
Assume that a bank has $2 million in reserves and checkable deposits of $10 million and the required reserve ratio on checkable deposits is 20%.The maximum amount of new loans this bank can make is
A) $500,000.
B) $1 million.
C) $200,000.
D) zero.
E) $700,000.
Correct Answer:
Verified
Correct Answer:
Verified
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