A Commercial Bank Has Checkable-Deposit Liabilities of $500,000, Reserves of $150,000

question 93

Multiple Choice

A commercial bank has checkable-deposit liabilities of $500,000, reserves of $150,000, and a required reserve ratio of 20 percent.The amount by which a single commercial bank and the amount by which the banking system can increase loans are

• A)$30,000 and $150,000, respectively.
• B)$50,000 and $250,000, respectively.
• C)$50,000 and $500,000, respectively.
• D)$100,000 and $500,000, respectively.

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