Answer the Question Based on the Following Consolidated Balance Sheet

Multiple Choice

Answer the question based on the following consolidated balance sheet for the commercial banking system. Assume the required reserve ratio is 12 percent. All figures are in billions of dollars: Refer to the above data. If the commercial banking system actually loans out the maximum amount it is able to lend, excess reserves will fall:

A) By $28 billion
B) By $22 billion
C) By $20 billion
D) To zero