If First Guarantee Bank Confronts a 10 Percent Reserve Requirement

question 122

Multiple Choice

If First Guarantee Bank confronts a 10 percent reserve requirement and has excess reserves of $2,000,000,what is the maximum amount of additional loans that the bank can extend?

• A)$200,000
• B)$1,800,000
• C)$2,000,000
• D)$20,000,000