Answer the Question on the Basis of the Following Consolidated

question 60

Multiple Choice

Answer the question on the basis of the following consolidated balance sheet for the commercial banking system.Assume the required reserve ratio is 30 percent.All figures are in billions. $\begin{array}{c}\begin{array}{lll}\quad\quad\quad\underline{\text { Assets}}\\\text { Reserves}\\\text { Securities}\\\text { Loans}\\\text { Property} \end{array}\begin{array}{l}\\\$ 51 \\109 \\100\\10\end{array}\begin{array}{lll}\quad\quad \underline{\text { Liabilities \& Net Worth }}\\\text { Checkable Deposits}\\\text { Stock Shares}\\\\\\\end{array}\begin{array}{lll}\\\$140\\130\\\\\\\end{array}\end{array}$





Refer to the data.If the commercial banking system actually loans the maximum amount it is able to lend:

• A) reserves and deposits equal to that amount will be gained.
• B) excess reserves will be $2.6 billion.
• C) excess reserves will fall to $1.7 billion.
• D) excess reserves will be reduced to zero.

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