Suppose a Transaction Changes a Bank's Balance Sheet as Indicated

question 12

Multiple Choice

Suppose a transaction changes a bank's balance sheet as indicated in the following T-account,and the required reserve ratio is 10 percent.

As a result of the transaction,the bank can make a maximum loan of

• A) $0.
• B) $200.
• C) $1,800.
• D) $2,000.

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Definitions:

Commerce Clause

A provision in the United States Constitution that grants Congress the power to regulate commerce with foreign nations, among the states, and with the Indian tribes.

Fourteenth Amendment

An amendment to the United States Constitution granting citizenship to all persons born or naturalized in the U.S. and guaranteeing all citizens equal protection under the law.

Commerce Clause

A provision in the United States Constitution that empowers Congress to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.

Federal Government

The national government of a federal country that shares power with states or provinces but has authority in matters of national concern.