Bank North's Balance Sheet

question 57

Multiple Choice

Bank North's Balance Sheet
Assets Liabilities
Reserves $300 Deposits $2000
Loans $2200 Capital $500
$2500 $2500
TABLE 26-2
-Refer to Table 26-2.Assume that Bank North is operating at its target reserve ratio and has no excess reserves.If Bank North receives a new deposit of $400,it can immediately expand its loans by ________ while maintaining its target reserve ratio.

• A)$260
• B)$272
• C)$340
• D)$400
• E)$700

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