If a Bank Has $25,000 in Excess Reserves and the Desired

question 83

Multiple Choice

If a bank has $25,000 in excess reserves and the desired reserve ratio is 20 per cent, what is the maximum this bank can loan?

• A) $25,000
• B) $20,000
• C) $5,000
• D) $125,000
• E) $30,000