Table 9-5 Bolton Bank: Partial Balance Sheet

question 177

Multiple Choice

Table 9-5
Bolton Bank: Partial Balance Sheet
(All figures in $ million)

-Refer to Table 9-5. The required reserve ratio is 10%. What is the maximum amount of new loans that Bolton bank can create and by how much can Bolton initially increase the money supply, assuming that newly created deposits are transferred to another bank?

• A) $30 million; $30 million
• B) $70 million; $30 million
• C) $70 million; $70 million
• D) $70 million; $700 million

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